photo credit: gruntzooki
Interest on home loans up to certain amounts needs to be lowered immediately, an Indian trade body has said, if the country’s real estate market is to get back on track.
The Associated Chambers of Commerce and Industry of India (Assocham) said the government should make housing loans up to Rs 30 lakh available at six per cent.
Above this amount, the ideal amount would be 8.5 per cent, added group president Sajjan Jindal.
He was reacting to a new mortgage package announced by officials on Monday, involving banks giving loans of up to Rs 5 lakh at 8.5 per cent and loans between Rs 5 lakh and Rs 20 lakh at 9.25 per cent.
He said the government move
“would not make any sense, as properties are hardly available at this cost not even in tier II and tier III cities”.
News outlets reported the measure largely failed to rally stocks and shares after it was announced, with many investors hoping for a more generous measure.
Although India still has high demand for property, soaring interest rates and the global credit crunch have meant buyers have found it difficult to get loans.
A building boom since 2000 has also created an over-supply of high-end apartments, which developers have previously been reluctant to lower prices on.
Related posts:
