Indian property market shivers

Can you say what is the demand of the person who is having the last gasp or on the verge of death? Does he/she remain in need of oxygen or any special medicine? It’s not possible for anyone to say but it is also true that a drowning man tries to catch even a straw.

Both of these examples are used to depict the present condition of the property market in India. What is the condition now? The situation was not good due to the worldwide economic recession and as a result of the recent terror attacks on Mumbai it is out of the frying pan into the fire.

This became largely evident when a strong demand with regard to the reduction of interest rate for both developers and homebuyers emanated from the foremost developers of the country of late. All they want at this critical stage of business and Indian property market is that this should be made a part of the bailout package for the real estate industry that the crisis committee of the Prime Minister is trying to make. Is there any other demand? Well, there are lots. The next demand is that there should be the blend of liquidity in the system. What makes the developers demand this? The industry of property is confident that this will result into the flow of more credits.

Speaking on this Ramesh Sanka, CFO, DLF stated, “We need further cuts in SLR and CRR so that credit is available readily”. It is to be noted that industry is passing through a perilous stage and is cash-starved hence. This is also making it difficult for the industry to have service loans and therefore it has no other option except demanding the expansion of a debt moratorium. When asked on this Vipin Agarwal, the Executive Director (Finance) of Omaxe said, “We would like our loans to be re-scheduled by at least one year in view of the present crisis.”

It has also been learnt that a section of the developers are trying to have tax benefits and the restoration of 80 I B of the Income Tax Act. The Indian property market is really shaking!!