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`HDFC rate cut for NRIs to boost property market'

Vimala Vasan

ABU DHABI, Jan. 18

THE one percentage point drop in interest rates on loans for NRIs by the Housing Development and Finance Corporation (HDFC) and the revival of the Indian property market in the past few months is expected to boost interest in Indian real estate among NRI s, with business this year likely to be double that of last year, a HDFC official said on Tuesday.

Mr. Thomas Cherian, Manager of the UAE office of HDFC, told Business Line that HDFC has dropped interest rates by one percentage point for NRIs, bringing it down to the lowest level in many years. The rate has dropped to 12 from 13 per cent for loans up to five years and to 13 from 14 per cent for loans up to seven years, he said.

``The move is in line with the interest rates in other sectors in India. With these affordable rates and low property prices, this would be the right time for NRIs to invest in properties in India,'' Mr. Cherian said.

He pointed out that individual loans in India had gone up by 40 per cent in 1999 due to the improvement in the real estate sector. ``It is expected to go up further this year. The growing interest in real estate is evident from the response to the recent Maharashtra Builders' Association show in Mumbai, which was attended by 25,000 people,'' he said.

HDFC plans to expand its operations in the Gulf region with franchisee offices likely to open soon in Saudi Arabia and Bahrain. It already has a presence in other Gulf states. ``With all these factors, we are expecting to double our business from this re gion this year,'' he said.

Among the upcoming plans are the introduction of property consultancy services. The first team of experts from the HDFC is scheduled to arrive in Dubai in the first week of February. They will provide information on properties in Mumbai and Bangalore.

``The advisory services are meant to help investors select from a wide variety of choices and also provide additional information required by them,'' Mr. Cherian said.

Teams will visit Dubai over the course of the year, providing information on various projects in India, he added.