photo credit: JasonRogers
India’s Urban Development Ministry (UDM) has drafted a bailout package for the country’s real estate market, including plans to relax rules on firms acquiring foreign loans.
The scheme, which will have to be considered by the Finance Ministry, is designed to get property developers through the credit crunch.
Other proposals include a reduction in home loan rates for affordable houses to encourage end users to buy.
The UDM’s plans follow calls for state help from the National Real Estate Development Council (Naredco).
Urban development secretary Dr M Ramachandran said:
“We have included some of the demands from the National Real Estate Development Council in the note.
“Once the finance ministry clears the package, it will go for Cabinet approval.”
Naredco has previously asked for a cut in interest rates on home loans by at least three to four per cent.
Indian rates have soared from around 7.75 per cent in 2004 to about 12.75 per cent recently.
Naredco has also asked its members to bring about a property correction by reducing costs, slashing profit margins, and making cuts in advertising and brokerage costs.
Some of India’s biggest real estate market developers are members of the council, including Unitech, DLF, Ansal API, Parasvnath Developers and Sobha developers.
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