Lower interest rates and more credit now represent the best chance the Indian real estate market has of quick recovery, business leaders have said.
The Associated Chambers of Commerce and Industry of India (Assocham) warned property deals had slumped dramatically in the last quarter of 2008.
But the group listed several forthcoming real estate deals as good reasons for optimism, while government action could also help.
Falling interest in Indian property investment saw housing demand drop by 50 per cent, but as interest rates continue to fall, buyers are expected to return.
Assocham said:
“The stimulus packages for the real estate sector along with the lowered interest rates are expected to revive the industry provided lending is made smooth and consistent.”
Upcoming property investment projects include a township for Greater Noida, announced by Ansal API, and a 400-acre development of homes in Sriperumbudur near Chennai, to be built by ETA Star.
Cheaper real estate loans up to Rs 20 lakh may also push up demand for property investment homes, the group added.
Assocham made the claims after its study, ‘Reality check on Real Estate’, showed lower demand for property investment would harm the economy, as 80 per cent of the real estate sector is connected to new homes industry.
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