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| Thursday, 31 July 2003 |
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HDFC loans for public servants, middle income group by Chamitha Kuruppu The Housing Development Finance Corporation Bank (HDFC) will introduce low cost luxury and semi-luxury housing apartments for public servants and the middle income group. Chief Executive Officer of HDFC Bank C.A. Sarathchandra told the Daily News yesterday that the subsidiary of the HDFC will initially invest Rs.100 million on the project. The most significant feature of the project is that these luxury and semi-luxury apartments will be in the price range of three to four million rupees which could be considered reasonable compared to the market price at present. At present at least Rs.10 million has to be spent to purchase a luxury apartment but this project will enable a middle income earner to purchase an apartment for three to four million rupees, which will be half the price, Sarathchandra said. The HDFC Bank also intends to provide financial facilities under concessionary rates when purchasing these apartments. The Bank is having negotiations with the relevant authorities at present to acquire land within the city limits. The HDFC Bank has identified a two-acre land belonging to the government within the Colombo city limits, the Director General said. Several financial organisations have shown a keen interest in this project and given the green light to provide financial assistance, he added. However, the HDFC will not kick off with the project until the present discussions are over. If the negotiations are successful the HDFC Bank will commence work before the end of this year. A number of private sector companies providing housing facilities is mushrooming daily. However, most of these apartments are 'out of reach' for middle income earners and they have to pay exorbitant prices. Therefore, the project will be the best solution, Sarathchandra said. The number of loans the HDFC Bank hopes to grant this year will be 15,000, an increase of 43% compared to the number of loans granted last year. As more than 90% of the loans the HDFC Bank would grant are for the purpose of construction of new houses, the figure of 15,000 can be considered as the number of new residential units that will be added to the national housing stock in 2003 with financial assistance from HDFC Bank. HDFC Bank has budgeted a total turnover of Rs.2,087 million for the year 2003. The net profit after tax expected during the year is Rs.254 million while the profit before tax for 2003 has been forecasts at Rs.318 million. Reduced interest rates on loans The Housing Development Finance Corporation Bank will reduce interest rates of housing loans up to Rs.500,000 to 9.5% per annum on reducing balance basis from August 1. This translates to a Rs.1044 monthly instalment for every Rs.100,000 borrowed for a 15 year term. CEO of the HDFC C.A. Sarathchandra said that this is the first time the interest rates are coming to a single digit. Reduced interest rates are expected to attract more customers for housing loans as well as to minimise difficulties faced by them when repaying loans. |
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