High bank rates does not deter Mumbaikars from craving a house

Mumbai, Apr 5 (UNI) Real estate industry in the Metropolis will see steady buyers despite the hike in interest rate by banks on home loans and tough government policies to curb inflation, experts opined today.

Property dealers, builders and investors assembled at the three-day 'MCHI Property 2007'--10th Real Estate and Housing Finance exhibition, which began here this morning.

''The rise in home loan interest rates will not effect the city as the demand for houses is high and compared to it the supply is low due to scarcity of land. Moreover, people in Mumbai are earning well and even if there is a hike of one per cent in interest rates it won't effect them much,'' President of Maharashtra Chamber of Housing Industry (MCHI) Mohan Deshmukh said.

Moreover, with more people coming and settling in the city as there are more job opportunities here, the demand for houses is always there, he said, adding the real estate industry is mostly based on demand and supply atleast in the city.

Zubin Mehta, chief executive officer of MCHI, opined ''There will be no correction in the price rates of the houses even though the interest rates have gone high. Moreover, the rates are bound to come down.

He said ''this is an artificial way of controlling prices and a temporary phenomenon''.

At the same time, he said that irrespective of the high interest rates housing is such a necessity in a city like Mumbai and people will definitely go ahead for it. Even if the rates don't come down they will get used to the increased rates and after a certain point of time they will plan their investment budget accordingly, Mr Mehta said.

''The rates may come down after the monsoon and the real estate business is usually low during this period everywhere following examinations of children, year ending and people going out for vacations'', Mayur Shah, Managing Director of Marathon Group, said.

Dharmesh Jain, Joint Secretary of MCHI, said ''Manpower in the city is high and accomodation is a major problem. Even if the price rise effects other parts of the country it won't be of much difference in the city.'' He said there are almost no new projects coming up. If compared with last year's exhibition there are only two new projects added to the exhibition this year. Whereas, the demand has increased with the increasing population in the state, thus creating demand for more houses.

However, there were some interested home seekers, who plan to invest without taking a loan from the banks.

Mituzia, a businessman, who is interested to buy a house said ''I am not going to take a home loan since the interest rates are high. I want to buy a house for the sake of investment as prices of houses in Mumbai will definitely go high in the future.'' UNI