30 percent fall in offtake of housing loans due to high lending rates by banks

Builders target business worth Rs 300 crore in Chennai expo

Chennai:

The real estate sector in India may be feeling the heat but builders in Chennai are optimistic and have a set a target of Rs 300 crore worth business during the three-day House Hunt expo starting from December 2 at the Chennai Trade Centre.

N Raghunathan, chairman of Builders’ Association of India, Southern Centre told reporters here on Wednesday that the expo will showcase properties concentrated in Old Mahabalipuram Road, East Coast Road, Tambaram and the untapped areas in north Chennai besides other areas.

The House Hunt Expo 2011 will bring buyers, builders and financial institution together besides will have a special legal and technical cell, said Raghunathan.

Interestingly, more than 50 builders and some from states like Karnataka and Andhra Pradesh are participating in the expo. “There is a temporary oversupply. To offset it, we are organizing the expo,” says Raghunathan, when queried over the timing of expo when the sector is staring at inflation and rise in lending rates by the bank. Sources told Express that there is a 30 per cent fall in offtake of housing loan due to high lending rates by the bank.

Surprisingly, builders are also working out a strategy to deal with rising prices of cement. “We are building a Rs 3,500 crore cement manufacturing plant near Ananthpur which will produce five million tonnes of cement,” says co-convenor of the project and past national president and trustee of the association R Radhakrishnan.

Cement which costs about Rs 300 in the private market can be bought for Rs 190 from the factory, says Radhakrishnan, adding that only those builders who have invested in the plant can buy the cement at that rate.

Meanwhile, the builders also raised their apprehensions over the new guideline value that is expected to come into force by next month end. “If the government is raising the guidelines value it should be based on infrastructure availability and not focused on market prices,” builders said.