Nationalised banks are flush with funds to finance dream homes, waiting to welcome prospective loan seekers. But they are not in sight so far despite a series of announcements of cut in interest rates in the past six months.

No rate cut, it seems, is enough to convince the loan seekers about taking a borrowing decision, at least for now. But this is puzzling bankers as well as real estate dealers to no end. The banks have idle money, while the real estate dealers have got their investment blocked in schemes they cannot wait any longer to dispose off.

Prominent city-based builder Vijay Shah is of the view that the real estate market has almost bottomed out and no further fall in property prices should be expected. "The prices have come down around 20 per cent in past couple of years. But while buyers are waiting for a further decline, real estate dealers are sticking to the quoted prices, which means a waiting game is going on," he said.

Industry sources say that so far builders had made high-end schemes for the up-market segment, which is finding no serious takers in the current meltdown period. Property prices that were around Rs 2,700 per sq foot some three years ago today fetch around Rs 2,000 per sq foot in areas that have been developed over the past three to four years, they say.

Another factor that is forcing buyers to put on hold their purchase plans is the expected announcement of new jantri (rate card to determine stamp duty) in the forthcoming state government budget.

In its zeal to empower women further, the state government may make further announcements in the budget. "Even if this is a vote-on-account budget session, the new jantri rates will have to be declared if it is meant to be implemented from April 1, 2009," said Shah.

Builders feel there is no further chance of decline in property prices, while bankers feel that more than the reduction in interest rates it will be the fall in property prices that will stabilise the situation.

According to Dena Bank General Manager (Gujarat) Mukesh Kumar Jain, it is the price of affordable housing that needs to be brought down further. "Affordable housing is not available easily even now. It is these people who are waiting for the prices to decline so that they can gain the maximum from the price trend," he said.

This January, banks have lent Rs 30.36 crore to 795 loan applicants in Gujarat who had applied for individual loans of up to Rs 5 lakh. Cumulatively, Rs 294.44 crore was disbursed to 9,941 applicants since April 2008. Housing loans worth Rs 67.54 crore for amount between Rs 5 lakh and 20 lakh were given to 635 applicants in January. Cumulatively, around Rs 643.53 crore was given to 7,676 applicants since September 2008.