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CHENNAI.....Good investment opportunities in all the segment of the city. Commercial rentals is on fast trek. Residential segment also having very good demand from rural areas. Outskirts of the city is now more costly then CBD residential areas.   AHMEDABAD..... ..... Huge NRI funds were recently invested in residential segment of the city. Commercial too is feeling the heat. Residential rates are marginally up by 20% since last quarter. The trend is likely to continue.   BANGALORE...... ...IT and ITES are again in the buying spree. Residential complexes are getting good demand. NRIs investments are up again. Service apartment concept is catching up in the city. Commercial lease rentals are rising.   PUNE.... ... Pune is poised as IT centre by the developers. In fact many leading IT brands are in the city. It has enhanced the residential rates. Outskirts like Viman Nagar, Pimpari and Chinchwad also now having great demand. Good time ahead.   DELHI .... ...The market is slow for residential units. Noida and Gurgaon also have touched historic level. New zones are in the competition. Faridabad and Merut along with Rohtak are busy catering for demand in Delhi and NCR    MUMBAI.. ..... ..Realty Fund and investors of large real estate holdings are still maintaining the price level. Developing zones are feeling heat. Small pocket developers are also panic in the market. Residential prices stagnated as of now.

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Sensitive Exposure

By Staff Reporter

Reserve Bank of India has categorised Real Estate Loans as “ Sensitive Exposure”. Banking sector have witnessed a spurt rise in loan advances to the real estate development. The apex Bank has cautioned the banking sector on real estate loan. Previously, the Apex bank had warned housing finance institutions for offering loans without proper documents.

Real Estate loans are 3-4% of total assets of the banks and are growing at very fast pace. Loans to builders and developers has touched 10,651 crore in FY05 from Rs.5,577 crore in FY04, with several banks stepping up the exposure.

ICICI Bank with its advances have released Rs.4,350 crore, according to the RBI, is on the top of the list among commercial banks who are venturing into financing real estate projects.

Others with over Rs.1000 crore advances are PNB ( Rs.2,920), BOI (Rs.2,836), SBI ( Rs.2,033), Citi ( Rs.1,262) and Indian Overseas Bank (Rs. 1,106 crore).

Real Estate loans are given to builders and property developers to acquire and develop property. Such loans are perceived as risky, and has been responsible for asset bubbles in some of the markets like Japan. Interestingly, while real estate loans have doubled in FY05, loans given for construction purposes have not recorded a significant growth.

While RBI is cautioning the Banks on commercial loans for land, NHB is considering to introduce risk weightage on loans to commercial properties would be increased to 125% from the current level of 100%.