Thursday, February 01, 2007

Property to get expensive

Real estate developers are likely to pass on the higher interest rates on loans that they are being charged to consumers. The Reserve Bank of India announced that it will mandatory for banks to set aside more capital for lending to property developers, therefore increasing the loan rates. The RBIs move is actually to discourage banks to lend less to real estate developers due to concerns on inflation. As usual, it is the consumer who gets passed the burden.

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