CommonFloor Survey: Reduce Home Loan Interest Rates “Reduction
in home loan interest rates would prompt me to buy a property in next one year,” says a prospective home buyer. CommonFloor conducted a survey at Pan India level to gauge the consumers’ response with regards to which announcement in the Union Budget 2015-16 would prompt them most to purchase a residential property in the next one year. In response, a whopping 62.5 per cent of respondents said that it would be the reduction in the existing home loan interest rates.
Home loan interest rates for most banks and financial institutions have been hovering in the range between 10.15 – 10.40 per cent for a while now. With the government’s ‘Housing for all by 2022’ agenda getting top billing, it was expected that home loan interest rates would fall to sub 10 per cent ranges across all major banks. However, it did not happen, even though one or two banks/financial institutions reduced the interest rates. Following RBI’s move to cut its key policy rate by a quarter per cent point in January, 2015, many state-run banks like United Bank of India and Union Bank of India slashed their interest rates by 0.1 – 0.5 per cent across various maturities, with effect from February. How will it impact? The fall in the rate of inflation by about 3 per cent compared to the same period last year, and the visible signs of improvement in the economy is expected to have a Doppler effect, with the RBI expected to make credit easier for consumers and corporates. This is expected to result in a lowered lending and interest rates for home loans across all banks. The Union Budget is expected to announce measures which would facilitate easier credit and lower interest rates on home loans to consumers. This will also result in banks increasing credit
to real estate developers. If banks reduce interest rates on home loans to below 10 per cent, it will be the first such instance in more than four years. This will act as a confidence booster for new home buyers with developers also expected to embark on new residential projects, particularly in the affordable segment. What other announcements would prompt buyers? For another 37.5 per cent respondents, raising the housing loan tax exemption limit would influence their buying decision. It is in this context that the prospective buyers are looking forward to the upcoming Union Budget with bated breath. Lowering of lending rates and interest rates for home loans is expected to have an immediate and definite impact on property sales. Source: CommonFloor.com For Latest Updates on Real Estate Updates, Property News and Cities Infrastructure Developments Visit: http://www.commonfloor.com/guide
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