State Bank of India has set a target of about Rs 3,200 crore in home loan disbursals in Tamil Nadu and Pondicherry, representing a 30-per cent growth in home loan portfolio of about Rs 10,500 crore in the region.
Last year the bank disbursed over Rs 2,000 crore, according to Mr J. Chandrasekaran, Chief General Manager, SBI, Local Head Office Chennai.
The first half of the current year is seeing a slow start in home loan disbursals as is usual for the market. It is the latter half that brings in the most business with the concentration of festival season and upswing in the market. The average ticket size for most loans is about Rs 23 lakh in this market, he said.
Mr Chandrasekaran was addressing media persons following the inauguration of three-day, SBI Property Fair in Chennai on Friday. Apart from concessions and speedy approvals, SBI has a clutch of home loan products targeting the young.
Oberoi ropes in Samsung C&T
Oberoi Realty has appointed Samsung C&T Corporation as its general contractor for the high rise mixed use project in Worli, Mumbai. According to a press release from Oberoi, this contract marks the entry of Samsung C&T into the building construction space in India. The project, by Oasis Realty, a joint venture between Sahana and Oberoi Realty, is scheduled to be completed over a period of 53 months.
Mr Vikas Oberoi, Chairman & Managing Director, Oberoi Realty, said in the release, “Samsung C&T has a track record of constructing the world's tallest landmark buildings using advanced construction technology. This association will enable us to grow Oberoi Realty's vision of bringing the best international construction practices to India.” Samsung C&T has constructed many of the world's tallest landmark building projects such as the Burj Khalifa in UAE and the Petronas Tower in Malaysia.
The high rise mixed use development at Worli, Mumbai has three phases comprising a residential tower, commercial office space and a luxury hotel. The building is designed by KPF (Kohn Pedersen Fox Associates), USA; and the structural consultant is LERA (Leslie E. Robertson Associates), USA.
Credai concern over delayed approvals
Project approvals have slowed down over the last several months and this has hit the launch of residential projects in the State, according to the Confederation of Real Estate Developers Association of India – Tamil Nadu.
Representatives from the developers' confederation listed out a range of factors that have hit the market in Chennai and other major towns despite the emergence of the city as a mature and stable market. Labour shortage, increasing costs of inputs, over supply of non-SEZ IT space which can be put to better use in other market segments but calls for a policy decision were some of the issues highlighted at a press conference earlier this week.
According to Mr Chitty Babu, President, Credai-Tamil Nadu, approvals for over 256 projects are pending with the Chennai Metropolitan Development Authority and over 459 with the Department of Town and Country Planning which together account for over 43.5 million sq.ft of development. These represent a huge employment opportunity, revenue to the government, and supply to a market that badly needs the built up space, with a majority of these projects being in the residential segment.
While emphasising that Credai is not for indiscriminate approvals, approvals of projects for which the papers are in order need to be expedited.
The Government needs to put in place a transparent, single window clearance system for approvals. Similar practices have come into vogue in Karnataka, Pune, Kerala and Bihar where applications that meet the norms are cleared in a matter of weeks.
Mr Prakash Challa, immediate past president, Credai, expressed concern on the increasing home loan interest rates which have mounted from about 8 per cent six months back to over 11 per cent. The RBI is also tightening the screws on supply to real estate projects.
The sector does not deserve this treatment as it has consistently been a good performer and only a fraction, about Rs 1.02 lakh crore of bank funding out of the total loan portfolio of Rs 38 lakh crore is tied up in the real estate sector.
Credai representatives said that in Ambattur and the Old Mahabalipuram Road, over 10-12 million sq.ft of IT space is lying vacant. The Government needs to allow this space for utilisation for non-IT use to exploit this valuable asset and prevent build-up of nonperforming assets. Mumbai has expanded the scope of IT buildings for use by the financial services sector including banking and insurance. This could be done for a fee to balance the additional built-up area that was allowed for IT buildings, they said.
According to Credai members, steep increases in the prices of cement and sand are also driving up prices.