India property expo hopes to garner Rs 150 cr in Singapore

Source:Press Trust of India / Singapore April 24, 2010, 14:18 IST

Some 600 Indian property projects are on display in Singapore this weekend, hoping to attract interest and Rs 150 crore of investment from Non-Resident Indians in the city state.

The two-day property exhibition, "Realty India 2010", is offering apartments, condominiums and villas within the price range of Rs 5 lakh to Rs 5 crore, said Chairman M I Sait of the Sait Group of Companies, which organised the exhibition, today.

"We are expecting to handle some Rs 150 crore worth of transactions from this Singapore property showcase, having handled Rs 80 crore transactions in our 2008 exhibition," he told PTI on the sidelines of the exhibition being held in the shopping belt of Orchard Road.

"We have a wide range of property on exhibit, suitable for NRIs to invest in houses in India," he said after inaugurating the exhibition this morning.
   
The exhibit showcases projects of top developers, including Emaar MGF Land and the Indian Real Estate Opportunity Fund (IREO).
   
The Times of India exhibition has travelled to Singapore from Bahrain, where it was held in March.
   
Sait said the show will be held in Qatar in June, London in August, Canada in September and Australia in October.
India property expo hopes to garner Rs 150 cr in Singapore

Real estate management courses launched

 
 

Source:Property plus,The Hindu,17 April 2010

One-year distance learning programmes for working professionals

Considering the growing need for specialised real estate management education, IDS National Institute of Real Estate Management (IDS NIREM), established by the Industry Development Society, a real estate sector development and promotion body, has launched two real estate courses, PG Diploma in commercial real estate and PG Diploma in real estate management.

These courses are being offered as one year distance learning programmes, considering the time constraint of working professionals.

Both the commercial real estate and the real estate management programmes are patterned on MBA in real estate and are also offered at diploma and certificate level.

The commercial real estate programme is designed to provide the course participants with thorough knowledge and practical skills to analyse, acquire, finance, and operate real estate assets.

Similarly, the PG Diploma in real estate managementis designed to enable students gain expertise and knowledge of all aspects of real estate including real estate management, finance, marketing and development.

Both the courses offer the real estate professionals an unequalled educational growth and career advancement opportunity.
These courses will not only enhance their knowledge and skills but will help them get more and better professional opportunities. NIREM has started accepting applications for both the programmes scheduled to start from May 2010.

Know how to choose the right tenure

Source:The Hindu,Bangaluru

Part prepayments reduce not only the term of the loan but also the total interest payable

Home loans are for the long term and as such, banks and Home Finance Companies (HFCs) normally offer repayment tenure up to 240 months (20 years). Some banks offer tenure up to 300 months (25 years) also. For salaried class applicants, normally repayment tenure is offered up the age of retirement and for self-employed applicants, the tenure offered would be up to the age of 65.

When home loans are provided jointly for husband and wife, father and son, normally the tenure offered would be up to the retirement of elder applicant, if salaried, or up to 65 years, if self-employed.
Let us analyse the pros and cons of long term vis-à-vis short-term repayment tenures.

The longer the repayment tenure, the higher is the loan eligibility. Let us assume that the applicant's income is Rs. 45,000 per month and the credit norm of the lender allows EMIs to be 40 per cent of the applicant's income. The applicant would be eligible for a loan of Rs. 8.67 lakh at nine per cent interest, if he chooses short-term repayment of five years. He would be eligible for Rs. 20 lakh at nine per cent interest, if he chooses a 20-year tenure

The longer the tenure, the lesser is the repayment instalment (EMI). For a loan of Rs. 20 lakh at nine per cent interest, the EMI for five years would be Rs. 41,517 and for 20 years' tenure, the EMI would be Rs. 17,995

The interest payable over the longer tenure would be very much high as compared to the shorter tenure. The interest payable over 20 years would be Rs. 23,28,450 approximately and for five years, the interest payable would be just Rs. 491,000 approximately.

Another disadvantage of long-term loan is that in the initial years of repayment, the principal loan amount repaid is very much less as compared to short/medium-term loans. For example, in the 25-year tenure, the loan repaid for the first three years is Rs. 22,314, 24,407 and Rs. 26,696 respectively. In the case of 10-year tenure, the loan repaid for the first three years is Rs. 1,29,278, 1,41,406 and 1,54,670 respectively.

Balancing act

Suppose the applicant is 35 years old and opts for a 25-year tenure, not only he will pay total interest of Rs. 30,35,118, he would be paying EMIs throughout his service. If he chooses the short term, he may not be eligible for the required loan amount as property costs are still very high.

Since interest rates have come down from 12-13 to 8-9 per cent, it is likely that interest rates would go up in future. In such a case, suppose the borrower has opted for a shorter tenure, the lender may allow him to extend the tenure. If he has opted for the longer tenure, he would be in for more hardships, as increased EMIs may become a burden or repayment may even extend beyond his retirement year and as such he would be in a life-long debt trap.

The balancing act is tough and you need to do proper home work and choose the right tenure.
In the U.S., since interest rates are very low (3-5 per cent), 30 years repayment is viable. But in India, where historically interest rates are higher (10-12 per cent), long-term loans are not advisable.

As can be seen from chart 1, the loan eligibility is very less for short-term schemes. Hence, for most of us, it becomes mandatory to choose longer periods ranging from 15 to 20 years.

After choosing the long-term tenure, you need to plan for lump sum part prepayments, as most banks and HFCs allow you to make part prepayment 3-4 times in a year without any penalty. Since part prepayments are apportioned towards principal outstanding, the loan tenure gets reduced. Thus, part prepayments not only reduce the term, the total interest payable also comes down considerably and the best part is that you will be getting rid of the loan much earlier. If you can prepay lump sum equal to 4-5 EMIs in a year, the loan tenure reduces to 10-11 years from 20 years.

by R.P. DESHPANDE The author is the Director of Institute of Home Finance and can be contacted at deshpanderp2007@gmail.com

Impact of colours- vasthu colour book

Vaastu Colour Book outlines a colour palette for each room of the house

Kansai Nerolac Paints Limited, one of India's largest paint companies, has launched its ‘Vaastu Colour Book.'

The book is designed with a special focus on the impact of colours on the vaastu of a particular space.

The book outlines a colour palette for each room of the house. The colours have been outlined keeping in mind universal directions i.e. North, North-West, North-East, South, South-West, South-East, East and West.

To provide in-depth analysis of colours and their relation with vaastu, the book includes a vaastu colour tool that is embedded with a magnetic compass in the book itself.

This patented colour and placement wheel gives the final recommendations for creating a space according to the principles of vaastu. This tool takes only a few seconds for the user to arrive at the colour palette and placement of furniture and accessories within a particular space.

Sebi may cap PMS fees on realty fund

Source:23 Apr 2010, 0559 hrs IST,Reena Zachariah & Apurv Gupta,ET Bureau


MUMBAI: The Securities and Exchange Board of India (Sebi) is considering a cap on the fees charged by portfolio management service (PMS) providers for their real estate fund, a person familiar with the development told ET. Investors have complained to Sebi that most PMS providers are charging the full management fee upfront , rather than in proportion to the net invested amount.

The capital market regulator recently met some of the top fund houses to understand their fee structure, and recommend changes to make it more investor-friendly .

Most real estate funds collect money from their clients in phases. Assuming , a client wants to invest Rs 100 in four instalments of Rs 25, and the annual management fee is 2%. Ideally, the money manager should charge a fee of 50 paise on every instalment of Rs 25. Instead, he charges the client Rs 2 at the time of the first instalment itself.

According to a person familiar with the matter, the thinking within Sebi is that it is unfair of portfolio managers to charge a fee for the amount they are not managing.

Currently, portfolio managers follow the 2:20 structure, where 2% is the fixed annual management fee, and 20% is the performance management fee.

Portfolio managers are eligible to charge the performance management fee only if they cross the hurdle rate, which typically ranges from 10-12 %. For every rupee that the fund delivers in excess of the hurdle rate, the portfolio manager pockets 20 paise.

Understandably, portfolio managers think the current fee structure is good enough.
“The investor expects returns on the gross commitment amount and not on the net amount after deduction of fee,” a senior official with one of the top PMS providers in the country said.

“The practise of charging fee during the commitment period aligns the interest of the investor to the portfolio manager. Besides, the performance fee eligibility is only after the specified and agreed hurdle rate is crossed, which is an incentive for the portfolio manager to deliver superior risk-adjusted returns,” he added.

Following the ban on entry load charged by mutual fund houses, inflows into equity schemes have dried up. That is because distributors’ fee (which was being funded by the entry load) declined sharply and they chose to sell financial products which earned them a higher commission.

As a result, most of the large fund houses have increasingly been focusing on portfolio management services , given the flexibility in charging fees and paying the distributors.

According to a portfolio manager with a domestic brokerage house, many fund houses have been charging disproportionate fees, and also the calculation is not always transparent. “There is a need for having some guidelines on how to calculate fees for unlisted product,” he said.

According to Sebi data for 2009, there are 247 portfolio managers registered with the regulator, managing around Rs 2.71 lakh crore. Of this, Rs 2.35 lakh crore is invested in debt schemes, Rs 30,000 crore in equity, and Rs 6,000 crore in other investment schemes.

Portfolio management service providers offer similar services such as venture capital funds and hedge funds. However, in order to address certain systemic issues involved with portfolio managers, Sebi has in recent times has tightened regulations governing them. These included increasing the minimum net worth requirement for registration,
 and having to maintain an individual account for each client rather than pooling the assets.

AB Financial Services plans Rs 1,000-cr realty fund

Source:22 Apr 2010, 0318 hrs IST,Sobia Khan,ET Bureau




BANGALORE: Aditya Birla Financial Services, promoted by the Aditya Birla Group, is launching a real estate fund at a time when realty companies are finding it difficult to raise money through traditional routes. The firm expects to raise Rs 1,000 crore from investors in the next six months.

The optimism stems from a rebound in the real estate market. “Markets across the country have begun the ‘upward phase’ of another cycle and the fund will allow retail investors to gain from the opportunity of investing in the Indian real estate sector,” said Shashi Kumar, head, real estate investment advisory of Birla Sun Life Asset Management.

The proposed fund to be called Aditya Birla India Real Estate Fund-I, will have a greenshoe option of Rs 250 crore, and will be advised by the group’s asset management arm, Birla Sun Life Asset Management.

An individual has to invest a minimum of Rs 25 lakh, while an institutional investor needs to put up at least Rs 10 crore. “The prime aim of the fund is to enter an investments at the stage of land cost and ensure adequate control, monitoring and review of such investments,” added Mr Kumar.

The fund will be invested in special purpose vehicles created by realty firms to implement projects. Despite a modest recovery in the market, realty firms have found fund raising an arduous task.

Banks have tightened lending norms, while the IPO market is not fetching them the valuation they want. The last two IPOs, Godrej Properties and DB Realty, received a lukewarm reception from investors at the time of listing. Nitesh Estates, a Bangalore-based firm, was forced to cut its IPO price in order to attract investors a few days ago.

The real estate fund will be invested into equity and, debt instruments of investee companies engaged in residential, commercial, retail malls, and other real-estate development projects in cities such as Mumbai, Pune, Chennai, Bangalore, Delhi, Kolkata and Hyderabad.

“Nearly 75% of the corpus of the fund will be invested in the residential space,” he added. The fund may also consider an anchor or cornerstone investor on a case-to-case. “The fund will share its profits with the investors in a ratio of 80:20 with the majority being given to the investors and the rest to the investment manager,” said Mr Kumar.

Delhi gets its tallest building

Source:ET :22 Apr 2010, 1447 hrs IST,PTI
  

NEW DELHI: A great city like Delhi must have a good civic administration and all stakeholders should join hands to make it world-class, Home Minister P Chidamabaram said today as he unveiled the tallest building of the capital housing the new MCD headquarters.

The 28-storeyed 112-metre Dr Shyama Prasad Mukherjee Civic Centre, built at a cost of Rs 650 crore, was inaugurated at a function here attended by former Deputy Prime Minister L K Advani, Leader of Opposition in Lok Sabha Sushma Swaraj and Delhi Chief Minister Sheila Dikshit, among others.

"A great capital city like Delhi must have a very good civic administration. This civic centre has been long overdue and we are truly proud of this magnificent building that will be a landmark in many many years to come," Chidambaram said.

"All those associated with MCD, Delhi government and the Centre will have to work together to make Delhi a world-class city and I appeal to the civic administration to give touch of quality in every aspect of the city like roads, schools, hospitals. We should never compromise on quality," he said.

When the infrastructure will be world-class, citizens will take pride in it and ensure its maintenance themselves, said Chidamabaram, who also took a round of the 'green building' constructed in an area of 12 acres.

Expressing happiness over naming of the building after Jan Sangh founder Shyama Prasad Mukherjee, Advani described him as a great leader and a martyr to the cause of the country. "I am very happy that MCD has decided to name it after him and the Delhi and Central governments also gave their approval," he said.

Complimenting the MCD for its "good work", Swaraj hoped that the new state-of-the-art building would provide all kinds of facilities to the citizens in a better environment.

Dikshit said it is an occasion to congratulate the citizens of Delhi. She said it is significant that the Civic Centre, with a number of energy conservation and environmental protection measures, was being unveiled on Earth Day.

The building, which will cater to 20,000 footfalls a day, will bring under one roof the deliberative wing and different offices of the civic body, which looks after 96 per cent of areas of Delhi. The existing MCD headquarters in Town Hall is expected to be turned into a heritage hotel or a museum.

The new headquarters of MCD has been constructed in an area of 1.16 lakh square metres with a concept of 'green building', which is designed for optimum utilisation of natural resources like air, water and sunlight. However, its construction had been hit by delays with the MCD missing several deadlines for shifting its offices.

Diamond city to have digital map, pilot project finalised

Source:Melvyn Thomas, TNN, Apr 20, 2010, 10.23pm IST

SURAT: The city of diamonds and textile is soon going to join other metropolitan cities in having a digital map. The Surat Municipal Corporation (SMC) has finalised a pilot project for digital map using the Geographic Information System (GIS) for Rander zone in order to keep a tab on the illegal construction and encroachments.

Official sources said the SMC's standing committee has approved the GIS mapping of Rander zone at the cost of Rs 11 lakh. The work has been given to Gandhinagar-based Bhaskaracharya Institute of Space Application Geo-Informatics (BISAG).

The project will start with the identification of landmarks and then a geographical survey to cover various aspects including property and land details, drainage system, and roads. The digitised map would assist the civic planners to keep a tab on the illegal construction and encroachments.

Sources said the pilot project would be launched for Rander zone. Soon the entire city and each of the seven municipal zones would be covered.

"It would be a multi-utility digital map based on the vital data of a particular area like roads, trees, slum settlements, canals and houses. It will have information on households in each of the census blocks," said Mukesh Dalal, chairman, SMC's standing committee.

The main objective of digital mapping is to divide the section into Enumeration Area (EA) containing on an average 130 to 150 households, developing a database of geographic boundaries in digitised form with real coordinates, to reduce under coverage and over counts in census operation, to ensure the optimum use of database for digital maps which will helpful in conducting future census and sample surveys and to facilitate in dissemination of census and survey results in a thematic form.

Ex-CJI's sons pay Rs 89.75cr to buy Delhi house

Source:TNN, Apr 22, 2010, 04.12am IST

Tags:Delhi|Y K Sabharwal
NEW DELHI: Chetan Sabharwal and Nitin Sabharwal, the two sons of former chief justice of India Y K Sabharwal, have bought half of one of the most premium residential properties, 7 Sikandra Road, in the heart of Lutyens' Delhi. The other half of the property has been bought by the promoter and MD of real estate company BPTP, Kabul Chawla. The total deal is worth Rs 117 crore.

On Tuesday, the Sabharwal brothers and Chawla together paid Rs 89.75 crore as part payment for the property.
"Kabul Chawla has purchased 50% of this residential property in his personal capacity. This is not a joint property,"said a spokesperson in Kabul Chawla's office. It means that the Sabharwal brothers will have to pay separately Rs 58.5 crore to complete the deal.

The name of Chetan Sabharwal and Nitin Sabharwal had cropped up earlier for running their businesses from the then CJI’s official residence. Also, the government had while responding to an RTI application in April 2009 revealed that the CBI was investigating allotment of a piece of land in Noida to Sabharwal's daughter-in-law. The income-tax department is also investigating a South Delhi land deal by the Sabharwal brothers.

The part payment of Rs 89.75 crore for the 7 Sikandra Road bungalow deal has been made by the Sabharwal brothers and Chawla with the approval of a single-judge bench of Delhi high court. In fact, Triveni Infrastructure had bought the 2.70-acre property for Rs 117 crore in 2008 in a court supervised auction. Triveni paid Rs 29.25 crore — 25% of the total amount — upfront. But, it could not pay the rest — Rs 89.75 crore — on the due date.

Instead of paying the rest of the amount, Triveni Infrastructure filed a suit in the court praying that another company, Angle Infrabuild Private Ltd, be allowed to pay the balance with a penalty of Rs 5 crore. But as some of the original co-owners opposed the request, the court did not accept the offer. Meanwhile, the Sabharwal brothers approached the court saying they would pay the balance amount of Rs 89.75 crore of the original deal.

Following the payment made by them, the court ordered execution of the sale deed in the name of the Sabharwal brothers and their associate.

The rest of the amount — Rs 29.25 crore — which was paid by Triveni Infrastructure in 2008 will also be paid by the new set of buyers.

Want forest land flat regularised ? SLP will help

Source:TNN, Apr 22, 2010, 03.42am IST

MUMBAI: Residents of Kandivli, Borivli and Thane—whose flats are in buildings situated on forest land—can now get their houses regularised by intervening in the Special Leave Petition (SLP) filed by the Hillside Residents Welfare Association (Hirwa) in the Supreme Court.

It was on Hirwa’s petition that the apex court recently directed the residents of Mulund and Nahur to pay the Net Present Value (NPV) as “penalty’’ to the forest department and get their flats regularised. The 4.5 lakh affected residents have already paid the NPV in the past two months, and the state government will be submitting the list to the ministry of environment & forests (MoEF) for a final clearance.

Hirwa’s petitioner Prakash Padikkal told TOI: “It is just a matter of time before the MoEF gives us clearance. But what is important is the fact that we have got relief for several flat owners staying on forest land in Mulund and Nahur.’’ He stated that the SC judgment would not be applicable to those who stayed in other areas like Thane, Kandivli and Borivli unless these residents come together as a group and intervene in the SLP.

“We are willing to help all residents of Mumbai and Thane who are affected by the forest land case,’’ he said. “After they intervene in our petition, we can also provide them with legal guidance.’’ He said that it would be “wise’’ for other residents to pay the NPV at this juncture. “Since the forest department is in the process of sending a list to the MOEF, they should hurry up and initiate the process for getting their flats regularised,’’ he said.

Co-petitioner Anmol Bhushan from the People’s Power of Nation (PPN) said that since the apex court has ordered residents to pay the NPV, half the battle is won. “The MoEF will now decide whether the land should continue as private forest or be dereserved,’’ he stated.

A resident from Swapna Nagari Society said, “Why are we made to pay penalty for no fault of ours? The government had goofed up and allowed constructions for so many years, and now innocent flat owners have to pay a price.’’

Padikkal said there was no option, but to accept the court verdict. “Some residents complained to me about the NPV payment. But if we challenge the court order, it will take years for another decision. Since we have a favourable verdict, we should pay the penalty and hope for the flats to get regularised at the earliest,’’ he said.

Rebirth of the Adyar creek

   

Source;Julie Mariappan & Devparna Acharya, TNN, Apr 22, 2010, 04.35am IST


CHENNAI: Pied kingfishers, yellow wagtails, egrets, white bellied sea eagles, chestnut-winged cuckoos, black-winged stilts...

A waterbody, once a dumping site laden with tonnes of debris and gallons of sewage, has begun attracting migratory birds, thanks to the state's ambitious restoration of the ecologically sensitive Adyar creek. The Adyar Poonga Trust (rechristened as Chennai Rivers Restoration Trust (CRRT) recently) is racing against time to complete the first phase of restoration of the 58-acre stretch, one of Chennai's most eco-sensitive spots, before November this year.

"It was a filthy place, with debris strewn around. Cattle was being reared by neighbouring slum dwellers and anti-socials made merry in the area that was full of thickets. Initial assessment of the creek area was, in fact, done from the nearby high-rise structures because no one could enter the poonga (creek)," says an official associated with the project.

CRRT had to excavate 150,000 tonnes of construction debris and garbage from the site to create a water body embellished with earthern pathways, wooden bridges, signage and bamboo pavilions. About 91,280 plants of various species are being planted inside at locations such as the entrance plaza, swale area near Town Planning Scheme Road, on the rear side of Ambedkar Manimandapam and along Santhome entrance plaza. About 37,600 reeds are being planted along the water margins.

"Adyar poonga is a fulcrum for environmental education," says K Phanindra Reddy, member secretary, Chennai Rivers Restoration Project. As part of the educational reach programme, eco-clubs are being set up in neighbouring schools and colleges by the Trust. "Adyar creek will eventually become a model for restoration of water bodies, including Cooum and Adyar," Reddy claimed.

As part of the restoration, the CRRT also plans to have a green centre in the erstwhile fisheries building near Ramakrishna Mutt Road. "An audio visual room, environmental education centre, library to document creek activities, laboratory to check water quality, a souvenir shop, coffee corner, all form part of the centre," Reddy said. Restoration work will soon extend into the estuary spreading over an area of 300 acres.

Initially spearheaded by Chennai Corporation and supported by Tamil Nadu Road Development Company Ltd, this project was conceived primarily as an effort to restore the fragile eco-system of the Adyar estuary and creek and raise awareness among the public about the environment.

The estuary has been a topic of furious discussion among ecologists and environmentalists for a long time now. Adyar river, one of the three major waterways in Chennai apart from Cooum and Buckingham Canal, is where migratory birds flock the most. According to Madras Naturalists Society secretary K V Sudhakar, "the area where the river and the sea meet is a major feeding ground for birds as it is rich in many organisms. A few years ago, our society recorded the presence of over 200 different species of birds in the creek," he added.

But the restoration project is seen by critics as excessive development work around a natural ecosystem which needs to be left alone. "Restoration of the creek would mean bringing the creek back to its natural condition. I would like to call this a transformation project where an existing natural ecosystem is being engineered into a tourist spot," said Nityanand Jayaraman, a freelance journalist and an environmentalist. According to Nityanand, the marshlands of Adyar creek is being turned into an artificial freshwater ecosystem in the process.

On the other hand, Sudhakar, says the project is a step in the right direction. "All the trees being planted are native, and the people who have undertaken the work know what they are doing," he said. Referring to the massive real estate development that Chennai is witnessing, he said the ongoing measures would evoke interest in saving the creek. "With this project, you are bringing in the public, who will see what they are losing and take an interest in saving it . Awareness is very important."

Ashiana Housing to enter South India in a big way

Source:20 Apr 2010, 1818 hrs IST,P K Krishnakumar,ET Bureau


KOCHI: With the success of its Utsav brand of retirement resorts in northern parts of the country, Ashiana Housing Ltd is now taking the concept down south.

The real estate company has identified around seven locations in South India for setting up retirement homes after a survey and will start operations in four places soon. ``We will start with Bangalore, Chennai, Hyderabad and Kochi and move to other locations like Coimbatore, Mysore, Vizag later,’’ Mr Ankur Gupta, executive director, told ET.

At present, Ashiana Housing has Utsav retirement resorts at Bhiwadi, Jaipur and Lavasa with over 750 functional apartments. The company is targeting ten locations by 2013 and a total of 1300 units by 2013 with an outlay in the range of Rs 75 to 100 crore. Apart from South India, the company is looking at Mumbai, Pune and Kolkata as well.

Mr Gupta said the company is in discussion with local land bankers and developers for joint ventures in key locations in South India. The size of the projects would range from 10 acres to 30 acres. `` We will bring in our expertise in construction and post maintenance in the construction,’’ he said.

The resorts have been designed keeping in mind the requirements of the senior citizens and have facilities for social, medical, spiritual activities and recreation. To make life easier for old people there are emergency switches at different places, big sized switches in red colour, inbuilt night lamp, anti skid tiles and bathrooms equipped with arthritis friendly handles, Mr Gupta points out.

Ashiana Housing, which also does regular housing projects, has completed 90 lakh sq ft in the last 30 years. Almost 55 to 60 % of its total projects, in fact, belong to the regular housing category while the rest is accounted by the retirement resorts, which was started by the company around six years ago. In the next 2 to 3 years, the company wants 50 % of its projects in the Utsav category.

The company is expecting an investment in the range of Rs 350 to 400 crore in the real estate sector in the next five years as the prices have stabilized and the realty sector is looking up. It has targeted Rs 250 crore turnover in the current year with increased thrust on the housing sector.

Realtors say RBI move won't affect home loans

Source:Mail Today Bureau New Delhi, April 21, 2010



The real estate sector welcomed the credit policy announced by the Reserve Bank of India (RBI) on Tuesday.

The sector termed the central bank's move as balanced and said there will be no immediate effect on home loan rates.

"The RBI policy is balanced. It gives a strong message on inflation indicating a possible tightening of interest rates in the future. But it may allow infrastructure growth with measures on infrastructure bonds," Pradeep Jain, chairman, Parsvnath Developers, said.

"I don't foresee any increase in interest rates on home loans in the first quarter of the current fiscal as currently there is sufficient liquidity in the market. But definitely the banks will be raising the lending rates in the long run," he said.

"However, in the near-term, home buyers will not find interest rate as a stumbling block in their buying decisions. This is applicable to the housing loans as well, which is a relief measure for the realty sector," Jain added.

Another welcome step is a cut of five per cent in the substandard bank loan rates, which now stands at 15 per cent. This will help infrastructure companies to acquire more funds from banks, which will solve the longterm funding problems faced by the companies, he added The National Real Estate Development Council (NAREDCO) has also applauded the anti- inflationary stance of RBI in curbing prices of the major inputs in construction, steel and cement.

However, Rohtas Goel, president, NAREDCO, said, "At least the first-time home buyers should be covered under priority sector borrowing by RBI, with upper borrowing ceiling of Rs 30 lakh." According to Vidur Bharadwaj, director, The 3C Company, "The repo rate hike will turn funds costlier for banks, which might result in the increase in interest rates. But since home loan is an asset- based secured loan in a bank's portfolio, it may not see any immediate rise."

"The majority of home buyers choose a property based on their immediate requirements. So, a marginal rise in interest rate is not of much consequence to an end- user," he added.

The Bombay Stock Exchange (BSE) Realty Index advanced 3.08 per cent and BSE Bankex moved 1.53 per cent higher on Tuesday.