Nov. 18 (Bloomberg) â€" DLF Ltd., India’s biggest property developer, has deferred some projects and plans job cuts to cope with the economic slowdown, Chairman Kushal Pal Singh said. The New Delhi-based developer had said earlier this month it didn’t plan to shed workers after profit fell by 4 percent in the three months to Sept. 30 and the number of employees declined by 12 percent during the quarter. The global financial crisis is leading Indian stocks to their worst year on record, crimping purchasing power even as a five-year rally in property prices and increased borrowing costs hurts demand. DLF shares have plunged to nearly a fifth of their value at the start of this year amid a slump in property prices. â€The key thing is how to boost demand,'’ Singh told reporters in New Delhi. â€Prices have come substantially down, so much that projects will shut down. There is a lack of money supply to developers.'’ The company is paying 12 percent to 13 percent interest on loans, Chairman Singh said, without giving comparative figures. DLF has declined 79 percent this year. The Realty Index of Bombay Stock Exchange fell 85 percent since Jan. 1 as investors shun property stocks. The government last month eased rules for companies to raise funds overseas. The Reserve Bank of India had reduced the risk provisioning for bank loans for commercial real-estate to 100 percent from 150 percent earlier. Home mortgage loans should be brought down to 7 percent to boost demand, DLF’s Singh said. State-run Bank of India on Nov. 6 reduced loan rate to 10 percent from 10.75 percent on 15-year loans for up to 5 million rupees. â€There will be takers only when you bring down home loans,'’ Singh said. Speaking earlier at the World Economic Forum’s India Economic Summit, Finance Minister P. Chidambaram said developers must reduce home prices. Singh, speaking separately to reporters today, said the decline in raw materials costs including steel and cement would help bring down property prices. Developers in bigger cities such as Mumbai and New Delhi are holding prices steady, Jones Lang LaSalle Meghraj Property Consultants (India) Pvt. said last month. Housing prices in smaller towns such as Agra, Ludhiana and Kochi dropped an average 15 percent to 20 percent in three months to Sept. 30, according to Jones Lang LaSalle. Rental prices for offices and malls also fell as much as 20 percent across India in the quarter, the firm estimated last month.
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