DLF urges government to cut home loan rates (Lead)November 18th, 2008 - 5:27 pm ICT by IANS
New Delhi, Nov 18 (IANS) Hours after Finance Minister P. Chidambaram called upon industry to cut down prices, property developer DLF Tuesday said real estate prices were bound to come down due to lower input costs, but urged the government to slash interest rates by three percent.”Not that we will have bring it (prices) down. The market forces will bring it down,” DLF Group chairman K.P. Singh told reporters here on the sidelines of the World Economic Forum-India Economic Summit.
The government should play its role in the matter, he said, adding: “The government has to ensure through regulatory mode and policy to facilitate larger supply of housing in the market, then the prices will come down.”
Earlier in the day, Chidambaram said sectors like automobiles, hospitality and realty should consider cut in prices to stimulate growth in the market.
Singh said DLF had floated housing schemes in places like Kochi (Kerala), where prices were already “rock bottom”.
He added that prices in the realty sector could go down further as the raw materials prices were falling.
“The prices are already down. My feeling is that prices would come down further, as they are tied with input prices. Steel, cement, everything is coming down, so it will automatically reflect in the prices,” Singh said.
According to him, the developers are now facing liquidity problems. “The demand is low because people take mortgage loans which have interest rate of 12 percent,” he said.
Singh added that the optimum interest for mortgage home loaners would be seven percent, which will provide incentive to fuel demand.
“Present interest rate has to be brought down by three percent. Inflation is not a factor now. You have to flush the market with more money,” he said.