Banks, realty renewing ties
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Post-slowdown, banks and home finance institutions had suspended loan and property melas. BIJU GOVIND says that things are changing.
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— Photo: S. Ramesh Kurup
Good times ahead: A property show at Vandipetta in Kozhikode.
The signs of a recovery in the global economic sphere seem to be renewing the relationship between banks and home finance institutions and the real estate industry.
Earlier, these institutions had suspended their ties with the realty sector following the slowdown in the economy in the country and across the world that began with the sub-prime crisis in the U.S.
Now the situation has changed. If it was the builders hosting property shows to ward off a real estate collapse, today, the banks and home finance institutions seem to be ready to organise such events to prop up the market. The two-day property advisory mela organised by the HDFC on budget properties in the city this week has evoked a good response.
“We have kick-started the home loan fair in a small way by campaigning through e-mails and short messaging services. Only four builders have taken part in the show,” says Gokul Das, manager (North Kerala), HDFC (Home Loans).
“But the feedback has been tremendous. We have around 150 inquires and 38 participants making use of the opportunity to invest in the property. Two units have also been sold. These are some of the ways to support the industry,” he says.
Crescent Builders, Calicut Landmark Builders, PVS and ‘hi-lite’ builders have participated in the property mela.
The financial institutions expect the home loan segment to witness a boom in future, Mr. Gokul Das says.
The HDFC is now organising a property show for non-resident Indians in Riyadh, Jeddah and al-Khobar in Saudi Arabia.
Nevertheless, banks are still cautious but they are keen to build a relationship with the real estate industry. “The public sector banks are still following a stringent format in dispensing housing loans. On the other hand, the new-generation banks are more generous in offering loans to customers,” says K.V. Haseeb Ahamed, treasurer-designate of the State unit of the Confederation of Real Estate Developers Association of India (CREDAI).
In the past, the Kerala Builders Forum (KBF), which is now being transformed to CREDAI, has been working in close association with banks and home finance institutions. Banks are eager to fund approved projects of the KBF. The bond between the banks and builders has helped the growth of the industry for the last few years, he says.
Various loan schemes have been drawn up for clients belonging to different categories. Some of the banks offer a reasonable rate of interest. “The coming down of the interest rates will help to improve the housing sector,” Mr. Ahamed says.
Banks are also offering loans even up to 30 years with easy repayment options. Some of them are also providing legal services regarding property deals. Options of calculating the equated monthly instalments are provided to the homebuyers based on the amount of loan, interest rate and tenure in years.
The strengthening of attachment between the banks and the builders has resulted in property developers going for new projects. Crescent Builders is planning a 20-storey apartment project at Mananchira, in the heart of the city.
The project, Crescent Vathiad, will have standard amenities and construction conforming to international specifications. Intercom, access-control security system, DTH connection for each apartment and broadband connection are some of the facilities offered.
Crescent Builders already has two ongoing projects: Kings Spear on Mini Bypass and May Flower on Kottaram Road at East Nadakkavu.
Malabar Builders launched Royal Empress at Jawahar Nagar in the city last week. The plan is to set up super-luxury residential apartments. It will have 75 apartments, air-conditioned lobbies, a swimming pool, indoor games, a fully equipped air-conditioned club and air-conditioned master bedrooms.
M.P. Ahammed, chairman, Malabar Group of Companies, says that homebuyers can choose from two-bedroom flats of 1,044 sq.ft, three-bedroom of 1,525 sq.ft and 1,681 sq.ft and four-bedroom of 2,047 sq.ft.
The launch of these new projects backed by banks is a positive sign for the real estate business.
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