Will the latest rate cuts boost the demand in realty sector?

Currently there are not much projects in the market that offer houses for the low budget category. Most of the large projects in Chennai were launched during 2006 - 07 and in these projects there are quite a lot of apartments that are available. These units are priced very much above the budget category and are in the range of 40 - 70 lakhs and even when the developer reduces or offer such large discounts the rates it isnt going to come down to the low budget category. In fact, the developer would not be in a position to reduce to such levels since they would have paid a higher land cost and also the construction cost is very high. Thus the interest rate of around 12 - 13 percent is very high to enthuse buyers to purchase homes in these projects.  

If the housing loan rates come down to the 2005 - 06 levels, of around 7 to 8 percent for all housing loan amounts (say even a loan of Rs. 50 lakhs or more), the real-estate developer sector MAY see a large scale benefits. 

I don't think it will help. Because up to 5lacs & 5 yrs loan govt. banks are offering 8% interest & that is also for a limited period. And it is very difficult to get home in such a low price. The another thing is when builder had constructed the flats at that time cement & steel rates were very high, so it is also difficult for them to much lower down the rates.