Good news for the home buyers and those who have taken home loans. HDFC has cut the PLR by 50 bps for both new as well as existing customers. A new slab has been introduced for loans upto Rs 20 lakhs; interest rates are at 10.25%. The interest rates on loans above Rs 20 lakhs are cut by 50 bps to 11.25%. This comes after ICICI had announced rate cut on its home loan rates earlier this month. This is good news for home purchasers and real esate industry over all. Though more interest rate reduction has to be done before the demand really starts rising again.

DDA has declared the results of the housing scheme. 5,010 flats were offered for sale as part of this scheme.

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Realty major, Unitech is planning to cut rental prices of its Unitech Metro Walk Mall at Rohini, Delhi by about 15 percent. Presently, the 2, 20, 000 sq ft mall has a rental of Rs 100-150 per sq ft. "The mall does not have full retail occupancy despite higher footfalls because of high rentals," said an official. "To rationalize our operation, we plan to switch to a revenue sharing model with retailers." Revenue sharing is a strategy by which the retailer has to share a fixed percentage of his revenue, usually 3 to 10 percent, with the realtor. But Unitech is looking at 6 to 12 percent of the revenue share, the official added.

India's property market is poised for a deep correction and the prices are estimated to fall by up to 30 percent from current levels, with significant knock on effects on the economy, says a Goldman Sachs report. Supply substantially outstrips demand in commercial real estate, hints the report depicting a negative view on the real estate sector, and its supplier industries such as cement, iron, and steel The BSE Realty Index has lost more than 83 percent in the last one year, dragged down by heavy weights like Unitech, DLF and IndiaBulls Real Estate. On a monthly basis the sectoral index is down by more than 14 percent. The index is currently trading at 1,631 points as against 9783 points a year ago. "From the demand side, a property downturn, we think, will have negative effects on consumption and investment. As housing forms the largest component of household wealth, consumer demand will be impacted. The fall in collateral will also hurt firms' balance sheets, increase their funding costs, hurt confidence, and reduce investment demand. However, the impact on demand will be lower than in developed countries. Mitigating factors, such as India's favorable demographics, low mortgage penetration, falling interest rates and ongoing infrastructure demand, in our view, will keep the property downturn from being protracted. However correction is imminent," said an economist with Goldman Sachs.

Executive at real estate firms are facing job losses and salary cuts to the extent of up to 50% as sales refuse to pick up and credit remains tight. Omaxe chairman Rohtas Goel has taken salary cut of 50%. A Unitech spokesman confirmed the company had cut 10% of its 1,700 employees, and most of those who lost jobs were trainees. Delhi-based Ansal Properties and Infrastructure has also sacked 70-80 employees of its total 1,000 staff.

Leading private equity firm Actis has closed a $2.9-billion private equity fund, of which about $1 billion is likely to be invested in Indian companies over the next four years. Actis success bucks the trend among funds that have generally been finding it difficult to raise growth capital.

India’s biggest property developer DLF Ltd was downgraded by Merrill Lynch on concern that sales will slow and prices will decline as the nation’s economic growth falters. DLF was lowered to “neutral” by Merrill’s analysts. Indiabulls Real Estate Ltd. was also downgraded to “neutral”.