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LIC Housing shifts focus to loaning builders

The Economic Times

While the frozen liquidity lines have checked the real estate boom, LIC Housing Finance is disbursing more loans to builders/developers who constitute 6 per cent of their business as against individuals which make up 94 per cent of their business. . LIC Housing aims to convince builders to bring down prices to a reasonable level by offering easy and hassle-free loans to builders (for new projects). LIC Housing is funding builders in all projects sizes--big, medium and small. The company also ensures that the asset value of the securities given by the borrower as collateral is twice the loan value.

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RBI steps to spur growth in real estate, arrest forex decline

The Economic Times

: After pumping in around Rs 2.80 lakh crore liquidity into the banking system, the Reserve Bank today announced a slew of measures to give a boost to the real estate sector, in addition to taking steps to arrest decline in forex reserves. In order to ensure more liquidity for the real estate sector, RBI allowed the registered housing finance companies to raise short-term funds from overseas markets. the RBI also permitted Indian banks to offer better interest rates for foreign currency deposits by the non-residents. The RBI today reduced risk weights for corporate andcommercial real estate to 100 per cent from the earlier 150 per cent.

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NRI can invest

The Times of India

A NRI and PIO can invest in property here, and repatriate the rental income and sale proceeds abroad. They can rent it out, transfer it, or sell it as well. They can take the rental income and their investments in the property out of the country, subject to the foreign exchange regulations. Under the present relaxed conditions, NRIs can invest in property in India easily. He may also avail a housing loan from a bank. The authorised banks have been permitted to provide housing loans to NRIs and PIO for acquisition of a residential property in India. The NRI/PIO may transfer the property without any approval from the Reserve Bank of India (RBI) to anybody - either a resident of India or another NRI/PIO. In case of sale, the sale proceeds of upto two properties can be remitted outside India without any RBI approval.

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Banks to be more ‘considerate’ in lending to real estate sector

The Hindu Business Line

Banks are expected to be more ‘considerate’ in lending to commercial real estate with the Reserve Bank of India removing the additional capital requirements for advances to this sector.RBI on Saturday eased the capital requirements for bank advances to the real estate sector. Bankers said RBI’s move is a clear signal that banks must lend to real estate, which is facing a slow down in demand. Banking analysts, however, said they expect an increased flow of credit to the real estate at lower rates.

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RBI unveils sops for realty, markets

The Indian Express

In yet another move to enhance liquidity and boost the flagging economy, the Reserve Bank of India (RBI) on Saturday unveiled a package of measures, including a reduction in provisioning norms for the real estate sector, capital market and housing loans.After injecting liquidity through a series of cuts in repo rate and cash reserve ratio, the RBI has decided that the provisioning requirements for all types of standard assets will stand reduced to a uniform level of 0.40 per cent (except direct advances to agricultural and SME sectors), paving the way for further fall in interest rates in these crucial segments.

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RBI’S NEW ECONOMIC BOOST

The Indian Express

Provisioning requirements for standard assets cut to a uniform level of 0.40%, lowering cost of funds for banks Claims secured by commercial real estate to attract uniform risk weight of 100% as against risk weight of 150% Housing finance companies allowed to raise short-term foreign currency borrowings FOR INDIA INC.

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Rate cuts by PSU banks to boost realty demand again!

The Economic Times

It may be a small step, but it has still brought some relief to the realty sector which has been going through tough times. Last week, several PSU banks lowered lending rates by 50-75 basis points (bps). With the latest move, home loans are set to become cheaper. Construction of housing for the masses will only gain momentum which can be a catalyst for overall growth. Capital/credit should be made available at 7.5-8.5% per annum to credible developers and end-users.

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Home loan insurance secures property

The Economic Times

Property insurance provides protection against most risks to property from threats such as fire, burglary and earthquake. Open perils cover all the causes of loss not specifically excluded in the policy. In other words, it is insurance coverage for all risks other than those that the policy explicitly excludes. It is insurance policy that covers only losses which result from causes specifically listed in the policy. It includes damage caused by fire, lightning, or theft. Home loan insurance plans provide cover to your home loan in the event of any unforeseen calamity happening in your life.

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Big rate cut needed to lift economy: ICICI chief

The Economic Times

Interest rates have to come down by another 2-3 percentage points in order to stimulate demand in the economy, ICICI Bank chief K V Kamath said on Tuesday. The Reserve Bank of India has taken a string of measures over the past few weeks to improve liquidity and boost growth, cutting its key lending rate - the repo - by 150 basis points to 7.5 per cent and lowering banks' reserve requirements.

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Steel makers to cut production to offset supply-demand mismatch

Business Standard

After having failed to step up demand despite a 12-14 per cent price cut earlier this month, the domestic steel industry is now taking to production cuts to adjust the demand-supply mismatch and avoid inventory pile-up.Companies attribute declining sales to the lack of demand from the automobile, real estate and consumer durables sectors, which are facing rising inventory levels that have choked cash flows. However, the situation is expected to be better in November since steel producers have taken up a price cut.

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Govt to take steps to stimulate economy: Chidambaram

The Economic Times

Government will take steps to stimulate the economy to offset the impact of the global economic slowdown, the finance minister said. He urged companies to cut real estate prices and prices of goods such as cars as a way to stimulate domestic demand, saying state-run banks had assured him they were ready to lend to borrowers. India has grown at an annual rate of 9 percent or above for the past three years but is expected by many private economists to grow at about 7 percent this fiscal year to March 2009.

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SEZs to create 59 lakh jobs in Maharashtra: Govt

The Economic Times

Seeking to downplay criticism over lack of job opportunities for Maharashtrians in the state industries, the state government today said the proposed 131 SEZs in Maharashtra would create 59 lakh jobs. Of the SEZs proposed in the state, 64 would come up in coastal Konkan region, 44 in western Maharashtra, 14 in Marathwada, nine in Vidarbha and six in Mumbai. Locals would be trained by the Government for cetain jobs.

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Maharashtra reserves 80% of jobs in SEZs for locals

The Hindu Business Line

Companies planning to set up businesses in the 140 upcoming SEZs in Maharashtra will have to reserve 80 per cent of their jobs for residents in the State. The State Government has issued a Government Resolution (GR) to this effect. It defines a person staying in the State for 15 years as a resident. The GR is applicable to all enterprises in the State. A committee at the district level has been formed under the District Collector for implementing the GR and monitoring employment in the various enterprises.

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Builders’ body urges members to lower prices

The Hindu Business Line

The Confederation of Real Estate Developers’ Association of India (CREDIA) call to its members to lower prices comes at a time when the builder fraternity has already seen a price erosion of 30 per cent over the last six months.CREDIA on Wednesday urged its members to ‘lower prices to the levels possible’ in a bid to stimulate demand and tide over the current slowdown.

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Real estate cos ask for home loan at 7%

The Times of India

Real estate players are not willing to cut prices of apartments and houses as suggested by FM P Chidambaram on Tuesday. In hotels, residential and commercial everywhere, the projects deferred because of lower demand and liquidity crisis.Government should ensure that home loan is available at 7% to prop up demand in the sector as many projects have been closed down by developers. Parsvnath CMD Pradeep Jain, who is also the president of Council for Real Estate Developers' Association of India (Credai, Northern Zone) said that prices of on going projects have already fallen to an extent that the profit margins have reduced to single digit due to high inflation, which has increased the cost of construction by 25 to 30% in the last one year.

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Raigad SEZ voting: Govt wants more details

Business Standard

The much-awaited report by the Raigad district collector on referendum over the inclusion of 22 villages of Pen tehsil in the Mumbai special economic zone (SEZ) has been delayed further as the state government has sought a more detailed analysis. The SEZ is promoted by Anand Jain, a close associate of Reliance Industries Ltd Chairman Mukesh Ambani.According to the Centre’s SEZ policy, irrigated land cannot be acquired for SEZs.The activists protesting against the SEZ had earlier claimed that more than 90 per cent of the farmers had said no the project.

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Builders agree to cut house prices by 5-10%

The Times of India

Real estate developers have decided to cut prices on the houses they sell by 5 to 10%. Faced with a situation in which buyers have become scarce, two major bodies of builders announced the proposed cuts on Thursday. Developers feel the announcement of cutting prices will help satisfy the general perception that real estate prices should fall and hence bring buyers who are adopting a wait-and-watch attitude into the market. Kumar Gera, chairman of Confederation of Real Estate Developers’ Association (Credai) and CMD of Punebased Gera Properties, said the association has urged and advised its 3,500 member developers to make every effort to lower prices. It suggests that developers realize they must appear to be bowing to the popular expectation if they are to see a revival in the housing market.

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RBI makes recast of realty loans tougher

The Economic Times

India’s struggling real estate sector is set to come under further pressure in the coming weeks as the Reserve Bank of India (RBI) has made it tougher for banks to ‘restructure’ loans, forcing them to cut house prices or risk being starved of bank funding. Banks often resort to restructuring loans — a practice aimed at preventing loans from being classified as bad — when they sense their borrowers are facing difficulties in repaying loans. In a typical restructuring, banks give borrowers more time to repay the loan by extending the loan tenure, and sometimes, even at reduced interest rates. For restructured loans in all other sectors, the account can continue to be treated as a so-called ‘standard asset’ , thus sparing banks from having to make large provisions in their profit and loss accounts. The inability to restructure loans easily is forcing banks to put pressure on builders to cut prices, sell properties and service loans.

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Realty body mulls discounts route to boost sales demand

The Financial Express

Real estate body National Real Estate Devlopment Council (NAREDCO) is planning to take a couple of steps to boost demand in the sector. It plans to give 10% to 15 % discount on affordable housing, 1% to 5% discount on existing projects and 5% to 10% discount on future projects.

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Pune realty rates won't drop further: PBAP

The Times of India

Dispelling speculations of a possible reduction in realty prices in the city, the Promoters and Builders Association of Pune (PBAP) stated on Sunday that they have already bottomed out and it is highly unlikely that developers would lower prices further. The PBAP stated, "Prices in Pune have already corrected to the maximum possible extent and, in some areas, the correction has been as much as 25 per cent." PBAP's stand on realty prices in Pune has come in the wake of a recent statement made by the Confederation of Realty Developers Association of India (CREDAI), which led to a general feeling that all realty estate markets across the country would see a further price reduction. The PBAP stated that the government now needs to ensure that adequate liquidity is available in the system and, at the same time, aggressively push interest rates down.

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Punjab builders reject realty body’s call to reduce prices

The Financial Express

Builders in Punjab on Tuesday said they can reduce the prices of upcoming projects by five to 10% to revive the demand, but expressed inability to cut the rates of already constructed projects due to high input costs. Big builders like OMAXE, Ansal and DLF have echoed the suggestion of the NREDCO followed by an appeal by PM Manmohan Singh, but PBDA cited high cost of raw material as reason for its inability to reduce the selling price of its already constructed projects.

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FM: Pvt banks will be forced to cut rates

The Financial Express

Finance minister P Chidambaram on Tuesday said private sector banks will be forced to cut lending rates sooner than later due to competition from public sector counterparts. Public sector banks have reduced their prime lending rates by 75 basis points and extended it to all kinds of loans, like home loans and personal loans. Private sector banks at a meeting with Finance Secretary had said they will also follow the suit. But they have not.

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Realty firms not ready to cut prices, opt to wait and watch

The Financial Express

Even though the realty sector faces the heat of the global economic slowdown, builders of North are still not ready to reduce the prices of housing projects. These exorbitantly priced apartments are unable to attract buyers as the investors adopt a wait and watch approach. property consultants are of the view that the builders have to be more innovative to address the needs of the buyers.

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New group housing scheme

The Times of India

To provide more housing to meet burgeoning demand, Noida Authority has launched a new Group Housing scheme in several sectors after a long time. To make residents feel at home in Noida, nearly 40% of the total land is now earmarked for residential use, providing adequate accommodation at affordable rates, complemented by public amenities and other essential services. Choice in housing ranges from big kothis to small flats; in individual plots, complexes and apartment blocks.. Under this scheme, there are a total of nine group housing plots, whose size varies between 40,000 and 80,000 sq mt. All these group-housing plots will be allotted through two bid systems.Keeping in view the potential for natural calamities on any other disaster, the group housing projects have been suitably upgraded to cope with them. Demands for industrial and residential land in the suburbs have already triggered a phenomenal growth. A number of industrial, institutional, commercial and residential schemes have been launched to meet the demand, in the past two months.

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Low-cost house

The Hindustan Times

Low-cost housing (LCH) is all about cutting down construction cost by using alternatives to conventional methods and inputs. It is about the usage of local and indigenous building materials, local skills, energy saver and environment friendly options. Unlike conventional construction, abundant use of bricks and cement is avoided with rat-trap bond for walling. This means that a normal nine inch wall is made with invisible vertical cavities. This saves 20 percent of bricks and mortar.Larger players too are getting interested in the segment now. Many integrated developments across the country have low cost housing as a part of it. The most interesting part about this new-found interest in low-cost housing is the innovative ways in which companies are trying to cut down on construction cost while at the same time not compromising on quality.

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Government plans interest sops to ease home loans

Business Standard

The government is considering a proposal to make home loans cheaper for consumers through interest subsidy, aiming to stimulate demand in the realty sector which has a spin-off effect on many industries like cement and steel. The proposal will also include providing loans at below market rates to real estate developers. But the loan disbursed under this will come with a number of conditions like an upper ceiling on selling price of flats and individual homes.This measure is being mooted to ensure that the demand in the economy does not slow down.

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