@Abhi, Manoj Gaur, MD, Gaursons India Ltd told that with this move, stakeholders are now expecting the sales to improve as more potential customers will think of buying homes as the interest rates will be reduced. With weakening rupee and core sector index shrinking to 0.4% in the month of April, this move by RBI shows aggressive decision making which will be very crucial for the upcoming months.
Hi Shaunak, Home loan interest rates have been changed only once. In April, all major Home loan banks and corporations reduced their lowest home loan interest rates from 10.1% – 9.85%. We believe, due to RBI's monetary policies bank's hands are a bit forced to reduce interest rates and home loan interest rates will fall by at least 0.25% in the immediate future.
Well Shaunak, As per Pradeep Jain, Chairman, Parsvnath Developers Ltd. They were expecting the move thinking of the realty sector that has been struggling since last few quarters with increasing inventories and low demands. They hope that more banks will now pass on the benefit to customers and thus exciting the overall demand. Such generous moves coupled with policy reforms are necessary for the revival of the real estate sector in country.”
Hi Kishore, The message is very clear from the RBI that it wants to revive the economy and that will in turn help the realty sector. This is the 3rd time in the current fiscal that the central bank has cut the interest rates. But for a real revival in the home sales, home loan rates have to come down to 9-9.5%.
Right Arushisha,
In the history of marked decline, the move has come across as big relief for the industry. Following RBI's decision, commercial banks are most likely to cut interest rates on home loans soon. At the same time, the cash reserve ratio, which is the amount of money banks have to keep with the RBI, was left unchanged at 4%.
@rajat, State Bank of India reduced their interest rates on home loans by 15 basic points. The new rates are placed at 9.70% as compared to 9.85%. Interest rates play an important role in qualifying for and servicing a home loan but with the floating rate one can utilize of this benefit.
If i am not wrong then buyers can go back to their lender and ask them to reduce EMI component or reduce their loan tenure. If the benefits are passed to home buyers a rate cut such as this can raise the sentiment and encourage more corporate and retail consumers to prefer for loans.