New Delhi, Nov 21 : Welcoming Finance Minister Palaniappan Chidambaram''s appeal of cutting real estate prices to stimulate domestic demand, real estate developers'' association in New Delhi on Friday announced up to five percent discount on the existing projects.

Earlier this week, Chidambaram urged companies to cut real estate prices to stimulate domestic demand. He highlighted the fact that the state-run banks had assured him that they were ready to lend to borrowers.

Some real state consultants say that prices of homes in National Capital Region (NCR) have fallen by 10-15 per cent due to a fall in demand.

Real estate prices in property markets in the region had witnessed a rise by as much as 100-200 per cent during the real estate boom in the year 2005-2007.

“Respecting the sentiments and the emotions of the Finance Minister, we are advising our members to re- look and…the prices and we are advising them to reduce the price in the shape of discounts to the customers who are paying in time. Their payments are not default... we are advising them to give the discount from one per cent to five per cent on existing projects, but to the customers who are paying in time. And for future projects, we are advising our members to reduce the price by 5-10 per cent,” said Rohtas Goel, president of National Real Estate Development Council (NAREDCO).

Goel also added that future projects will see a discount from 5-10 per cent and future affordable housing projects would be 10-15 per cent cheaper.

“We will include the current prices in the future projects. We will give 5-10 per cent discount on the future projects and we will also give 10-15 per cent discount on the future affordable housing projects,” Goel told reporters.

The one trillion dollar Indian economy boomed in the past three years, growing at an annual rate of nine per cent or more. But that boom, twinned with soaring commodity and energy prices, saw inflation spiral to nearly 13 per cent in August.

The Reserve Bank of India (RBI) raised interest rates aggressively earlier in 2008 but has now had to drop them even more aggressively to counterbalance frozen money markets caused by the collapse of investment bank Lehman Brothers.

Now economists see growth at about seven per cent this fiscal year as airlines, real estate and carmakers cut costs and output. (ANI)