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« Stamp Duty Cut for Textile Mill Lands | Home | Ministry of Urban Development Needs to Revise Land Management Policies »

Home Loan Rate to Stay Unchanged

The Reserve Bank of India may take sometime to relax the current stringent fiscal curbs it has imposed on banks. For that reason, home loan borrowers will require to wait awhile.

The demand for home loans is sliding with soaring interest rates and the ongoing correction in property prices being major factors responsible for such a scenario.  The home loan industry had grown by leaps and bounds in the previous fiscal year, but the growth is likely to slow down by 18% in the current fiscal. The correction phase in the real estate market is likely to continue till September, say industry watchers.

The market should see reversal of the current trend in this festive season, expects Rajiv Sabharwal, Senior General Manager at ICICI Bank and in chare of its home loan division.

Although, Indian real estate is witnessing a downslide but it will take up the flight soon. Demand is a function of cost of funds – the interest rate on home loans and the price of the product, adds Sabharwal.

Property developers are keenly waiting for the property prices to stop falling any further.

Likewise, considering the inflation trend, the interest rate would also begin softening during this time.

The major issue was regarding the availability of housing in certain locations. Real estate prices would remain unchanged in region. Also, there were some areas which have not witnessed any price correction as no new product whether residential or commercial could be made available.

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