• Investment World
• eWorld
• Brand Line
• Mentor
• Life
• Brand Quest
• The New Manager
• BL Club
• Smartbuy
• Books
• Gallery

Stocks

• Quotes
• SE Diary
• Scoreboard
• Open-End Mutual Fund

Cross Currency

• Rates
  
  

Shipping

• Ports
  
  

Archives

• Yesterday
• Datewise
• Resources
• In Focus
• In Depth
• Events 2007

Group Sites

• The Hindu
• The Hindu ePaper
• Business Line
• Business Line ePaper
• Sportstar
• Frontline
• The Hindu eBooks
• The Hindu Images

The Government must take multi-dimensional steps to boost the demand of real estate as well as to facilitate the execution of projects.

First, the Government should realise the full value of home loan packages for genuine buyers. The recommended home loan interest rate can be around 7.5-8.5 per cent for up to Rs 20 lakh, and 8-9.5 per cent for loans between Rs 20 lakh and Rs 50 lakh. There should be an increase in income-tax rebate for interest of home loan borrower’s present slab of Rs 1.5-3 lakh.

These interest rates must be maintained for next five years, since home buyers don’t avail themselves of a loan when a project is still in the development process. They take a loan only after a year of their booking date. As of now, all affordable housing projects are in the conceptualisation and development stage, hence the EWS and LIG cannot benefit from the current low home loan rates.

The Government could offer concession in stamp duties/registration charges for low-income groups and economically weaker sections. This could push the demand among the low- and middle- income groups. It can even offer some subsidies to the developers acquiring land for setting up affordable housing projects. The costs of inputs such as cement and steel must reain stable, as they affect considerably the final cost of the project.

Copyright © 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line