Owning a house to be a distant dream

Despite a slight drop in interest rates on home
loans, real estate prices are still very high in big cities. Experts
say it will stay that way for several months. That means most people
still can't afford a home of their own.

Vivek and Smeeta
together bring in Rs 50,000 every month. After 15 months of negotiating
expensive bank loans and leaping property rates, they've decided owning
a house in Delhi is Mission Impossible.

"We have been hunting
for our own house for quite some time now. But with a budget of Rs 30
lakh we can afford a house only in the outskirts of Noida or Gurgaon,
so we decided to go in for a rented accommodation," said Smeeta Verma,
Resident.

All across India, middle class families are getting
doors slammed in their face. Home loans have climbed by five per cent
in the last four years while property prices have doubled in parts of
cities like Delhi, Bombay and Bangalore.

Fall in sales

A
survey conducted by ASSOCHAM or Association of Chambers and Industries
show that sale of residential property in the last three months is 70
per cent lower than the same period a year ago.

Over the last
four years, the resale market has dropped by 60 per cent in metros, so
nobody is buying property as an investment any more. The survey also
found that 33 per cent of those who've taken home loans have been
forced to extend their loan period by five years because of rising
interest rates.

Prices not to fall

But real estate
experts argue that dropping interest rates is not the way to go because
property prices are totally out of reach for the average Indian. Every
experts NDTV spoke to confirms that prices will not be falling in the
next few months in any major metro.

"But if someone is expecting
the property prices to fall to 2002 levels, that is quite unlikely. In
certain pockets like NCR, Bombay, Bangalore the sheer demand itself
will help property price to sustain or go for a minor correction. But
for smaller cities we may see a major correction," said Malay Ray,
Business Head, DCM Services Limited.

Banks like State Bank of
India and Punjab National bank have dropped their interest rate by 0.5
per cent for the festival season, but they deny that this will continue
beyond Diwali. And the problem is that middle class India still has
nowhere to live.
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