Banks and Real Estate Pre Launch Investments

by : Propertiesmls

With the realty sector growing rapidly and housing projects being a major part of that boom, property prices may not fall substantially. As banks are being less generous in providing loans to realty developers and brokers, the property market has begun to cool down.

As a result, property prices, which had touched the sky, seem to be slowly returning to solid ground. However, the real estate sector is still borrowing huge amounts from the banks.

Last year, an amount of Rs 80,000-90,000 crore was given out as loans to the real estate sector. That number is expected to touch around 105,000-115,000 crore, which is an increase of 25-30 per cent. Housing will drive much of this extra credit offtake, as that is one part of the realty boom that is driven by the end users.

Banks and housing finance institutions say that credit growth for real estate is not really slowing down since it is the actual users who are taking the loans. Some industry experts say that banks are a little less exuberant about lending to the real estate industry, and this is having a positive effect as it is making speculators exit the market.