‘Demand for affordable housing still strong’November 17th, 2008 - 5:02 pm ICT by IANS
New Delhi, Nov 17 (IANS) Demand for “affordable housing” is still strong in India and first-time home buyers would continue to drive the realty segment, a top industry official said here Monday.”Affordable housing market has a huge demand with consumers just sitting on the fence and waiting to get a clearer picture of the ongoing financial crisis,” Arun Nanda, executive director (infrastructure development sector) of Mahindra and Mahindra, told reporters on the sidelines of the World Economic Forum-India Economic Summit.
The Mahindra group has a wholly-owned subsidiary, Mahindra Lifespace Developers Ltd, operating in the infrastructure development segment.
He added that home buyers with a budget of Rs.3-Rs.4 million had just deferred their plans to buy new houses due to the concerns about the economic scenario, and things would “turn around as the housing finance market improves”.
On banks’ unwillingness to lend developers, Nanda said: “Earlier, housing finance companies used to fund as much as 90 percent of the cost of the project, but now it is difficult to find financing and the ones who are willing to lend will finance only about 60 percent.”
He added that the “fence-sitters” would step into the market as soon as the interest rates on housing loans go down.