ICICI Bank rules out immediate hike in home loans

ICICI Bank today said it has not taken any decision on hiking the interest rates in home loans in the immediate future.

After the last hike in interest rates during November-December 2004, the rates have been "more or less stable and reasonable. We have to wait and watch and have not taken any decision on hiking the interest rates in the immediate future," Rajeev Sabharwal, CEO, home loans division of ICICI Bank said.

But, there has been some increase in real estate prices in the last one-and-half years because of the steep increase in infrastrucutre cost like steel and cement, Rajeev said at the two-day real estate expo, "Reality 2005".

However, the hike is not much. "Ulitmately the customer is also watching and any unreasonable hike will not be accepted and with the increasing competition the prices should remain stable," Sabharwal said.

Rajeev predicted a growth of 30% in the market size this year over the last year's Rs 65,000 crore, where the growth was 25%.

Bangalore's growth in the real estate sector has been more than the country's average because of increasing job opportunties and steep rise in commercial development for office space, Sabharwal said.

The increasing competition will not only lead to "more and more improvement in quality of construction but also developers adhering to time schedules for completion of projects," Sabharwal said.

Ramani Shastri, president, confederation of real estate development association of india (Credai), said the market was upbeat and at least 20-odd developers are looking at tie-ups with companies from Singapore, Malaysia and the US.

"Purvankara group has already signed up with a foreign company and I see at least 7 to 8 joint ventures coming into Bangalore in next few months," Shastri said.

The lending size is also going to grow in the near future, Shastri said.

M R Jaishankar, convenor of the expo and past president of Karnataka Ownership Apartments Promoters Association (KOAPA), urged the state government to "reconsider" the increase in stamp duty and also sales tax which was 9.56% and 12.5%, respectively.

"This increase will have a cascading effect on the other sectors," Jaishankar said.