RBI has recently cut the repo rates further. The impact of the same is yet to be seen on home loan interest rates.
A lot of speculations were put to rest when the recent repo rate cut was announced by the Reserve Bank of India. While the industry had waited for quite some time for this development, buyers were also waiting to ensure they get better rates of interest against their home loans. The sheer fact that RBI has decreased its repo rates by 0.25 percent signifies that banks may lower their interest rates further for various loans.
Talking about the recent development, Pankaj Bansal, Director of a leading real estate group, says, “RBI’s decision to lower the repo rate is on expected lines. Inflation is at its lowest in the last five years and economic growth is picking up. This revision will positively impact sentiments surrounding the real estate sector. Banks will now offer loans at more attractive rates.
Cheaper loans for homebuyers will promote a renewed interest in residential property purchase from both, end-users and investors. The cost of funding for real estate developers will also reduce. Overall, this move indicates a positive direction for the economy in general and therefore, also for the real estate sector, as its performance is directly linked to the basic economic fundamentals.”
The sector is now hopeful that the banks will also reciprocate by further reducing the home loan interest rates, although no formal announcement has been made about the same. Brotin Banerjee, MD and CEO, of another leading real estate company, says, “It is anticipated that the rate cut announced recently, coupled with commensurate benefits for borrowers, will impact home loan rate positively and enhance the consumer sentiment.
With the market calling for measures that encourage investment (to boost growth numbers), we expect this move to keep the stimulus intact for potential homebuyers (to invest), and to benefit current borrowers.”