Body of the Association property developers from India (Wednesday) said the initiative RBI to tighten liquidity to control inflation was "not appropriate" and Apex Bank should instead take steps to deal with supply constraints.

"The move was a surprise to us. We expected a moderate increase of 25 basis points, but the rate hike of 50 basis points to slow growth," said Pradeep Jain Chairman CREDAI. He is also chairman of Parsvnath developers.

"This will make the expensive cost of funds for developers and buyers ... As a real estate development company, we are left with no choice but to disclose it to our buyers, resulting in an increase in property prices , he added.

House prices, Jain said: "It' forced to go", but refrained from giving the estimated gain.

Asked about the impact on housing demand, said the request would not be affected much, since potential buyers buy apartments of less value than was previously anticipated.

Jain pointed out that the business environment in different sectors have become complex, because the hardening of interest expenses, in combination with a continuous increase in input costs.

"We ask the RBI not to increase taxes further measures. In contrast, we appeal to the RBI to promote measures to improve supply chain management," he said.

Echo similar views, said the president Lalit Kumar Jain CREDAI: "The cost of financing will be higher, as banks are expected to increase their lending rates."

Jain said that the housing crisis is expected to rise to 37 million in 12 year plan from the current 24.6 million and the country would need U.S. $ 3.2 billion to meet the deficit.

"The house is a funding gap of about $ 70 billion over the next five years only among developers today," said Jain, a leading Mumbai-based Urban Development Kumar.

He points out that material costs have increased by over 35 % and wages have doubled over the last three years, Jain said: "Any rise in interest rates would be against-productive and my fear is that it lead to inflation instead of the brake. "

Contrary to the opinion of Credit, Global Consultants Realty said the RBI decision to raise interest rates would hit housing demand as interest rates on property loan will increase.

"It was expected, although the magnitude is always comes as a shock to the real estate sector," Jones Lang LaSalle India Director (Business) Sanjay Dutt said.

"The industry has taken a serious blow to the body to the combined assault of rising land costs and construction, real estate is finally finished goods more expensive real. Higher mortgage rates will undermine demand further, "he said.

Dutt said the request would be affected in the cities where the highest rates to purchase tickets and sizes will be most affected.

"Blue-collar home loan borrowers who have very limited budgets and are already struggling with the high cost of real estate will suffer severe because of this growing interest," he said.

Manging Director of Cushman & Wakefield (India) Anurag Mathur said the change in rates will adversely affect the final yet? The ability of users to increase the debt and then the service.

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"There is market demand, such as Delhi and Mumbai already feel the heat moderate slowdown in demand from end users, is still interested in buying," said Mathur.

Source: [Zee News]