Home Loan Rates Should Come Down Now: Developers
After the cut in Repo rate, home developers are hoping that the situation for home-buyers might improve further as home loan interest rates are expected to come down further. Will banks act fast and pass on the benefits?
Now the situation for home-buyers might improve further as home loan interest rates are expected to come down further. Why? Because the Reserve Bank of India (RBI), on rather expected lines, reduced the repo rate by 40 basis points to 4 per cent in an effort to further boost liquidity in the economy.
The rates at which the central bank lends money to banks is referred to as the repo rate.
“People, who have decided to buy a home during the lockdown period will take a quick decision if banks pass on the benefit,” said Pradeep Aggarwal, Founder and Chairman, Signature Global and Chairman, ASSOCHAM – National Council on Real estate, Housing & Urban Development. “Affordable housing will benefit the most as the buyers of this segment are very particular about the EMIs. With historically low EMIs, people will go out to buy and thus increase the demand. Now government has to come out with steps to help the developers working in this segment so that projects can be completed without any hindrance,” said Aggarwal.
Anshuman Magazine, Chairman and CEO – India, South East Asia, Middle East & Africa, CBRE said this move will encourage consumers to borrow more from banks due to the lowering of lending rates. “This is a clear step towards reducing lending rates, encouraging liquidity, preserving financial stability and supporting overall economic growth.”
Amit Modi, President-Elect CREDAI Western UP and Director ABA Corp said the steps taken by the RBI will further provide more relief to several Indians who have been forced to sit home in the wake of the novel coronavirus outbreak. “But first, all the banks need to make sure that there is a quick transmission of the announced rate cuts to the end consumer, else the whole effort will be futile,” said Modil. “We also wholeheartedly welcome the extension of 3 month moratorium on EMIs till August 31 and this should be applicable right away to bring relief to millions of homebuyers across the nation,” he added.
Dhiraj Jain, Director, Mahagun Group said the fence sitters will have no better time to buy then the current period. “People have already assessed the importance of owning a home, which was clear from the bookings during the lockdown period. The government must now step forward and give relief package to the sector so that things move smoothly,” said Jain.
Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and Proptiger.com said the repo rate cut along with the move of extending loan moratorium for another six months will be extremely helpful in lowering the burden for those who are paying EMIs or using credit cards and lower financial stress. “What needs to be seen is how quickly the banks reflect this change in their respective rates,” said Agarwala.
Prateek Mittal, Executive Director, Sushma Group said “the realty sector will garner extensive benefits and the reduced repo rate will hugely support the buyer and boost the demand”.
Uddhav Poddar, MD, Bhumika Group said the real estate sector was expecting the RBI to allow a one time restructuring of loans seeing the pain across sectors. “We hope to hear some announcement in that regard soon,” said Poddar.
Ankit Kansal, MD & CEO, 360 Realtors said “the Real Estate industry welcomes the prudent step”. “It will help in managing supply-side bottlenecks by providing better and easier credits to the developers. Likewise it will boost demand in the form of cheaper home loans,” said Kansal.
Harvinder Singh Sikka, MD, Sikka Group said the banks needed to take a leaf out of this and extend loans to the real estate sector. “This time it is likely that banks will transmit the benefits to customers quickly as RBI is likely to keep a watch on it. “
Vikas Bhasin, CMD, Saya Homes hoped that banks would pass on the benefit to the buyers in quick time. “The demand for homes will increase further as home loan interest rates will come down to a historic low. It is good news for the real estate sector,” said Bhasin.