Wednesday, August 22, 2012

Pressurize builders to make property prices more affordable : Chidambaram


Finance Minister P. Chidambaram has asked the banks to pressurize real eastate developers to bring down the price of the houses to give an impetus to the sluggish economic growth. In his meeting with the heads of public sector banks, Mr. Chidambaram said that the builders have large inventories of unsold residences, for which they do not have buyers at current level. Also they are not lowering the prices to raise demand.

He also told the banks that the situation has led to huge lock up of capital. He further added that builders have borrowed from the banks and the bank has also financed home loans for retail segment. At the end of the last fiscal, the banks had lent Rs. 2.5 lakh crore to retail customers while Rs. 1.2 lakh crore was disbursed to accounts of builders.

A senior banker also stated that the builders should review the market condition and make correction in prices rather than just expecting banks to reduce the interest rates on home loans. While representative of builders demanded a reform in regulations to allow them to reduce prices.

The union government is under a lot of pressure due to rising inflation, and sluggish growth rate, and this is one of the attempts to make residence more affordable and give a boost to the economy.

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