Realty sector to suffer if lending rate for home loans does not fall: DLF

NEW DELHI: Realty major DLF's Chairman K P Singh today the real estate sector will be affected adversely if lending rates for home loans do not come down to a moderate level.

"It is not because of the global problem but the internal problem which is interest rate," Singh told reporters here when asked about the impact of financial crisis in US on the domestic real estate sector.

RBI has hiked the key policy rates (repo rate and reverse repo rate) by 11 times since March last year to control inflation, forcing banks to increase the lending rate sharply on home loan as well as loans to developers.

"If the interest rates keep going up the way they are going, the real estate sector is going to suffer. It has to come down to a moderate level for growth," he said.

"Now, the focus is to contain inflation which is right but too much emphasis on inflation is not good for growth," Singh observed.

Addressing the company's shareholders at the annual general meeting last week, he had said: "A sustained level of high inflation and interest rates...have impacted economic growth and moderated the growth in our industry as well."

On the proposed central draft land acquisition bill, he said it is good as it takes into account the compensation and the rehabilitation of land owners.

However, he said the "government must retain the power to acquire land for public purposes. The public purposes should be planned urbanisation whether through public or private sector".