In another recent Real Estate News making headlines in 2012, the central bank of the country has slashed interest rates on home loans. This is positive news for the housing sector. Homebuyers can intensify the search for a property.
Reserve Bank of India, the central bank of the country has reduced the interest rates on home loans. This move has happened after three years of increasing the rates on home loans. RBI has slashed the rates by 50 basis points and it comes to 8%. This means that rates on home loans and auto loans are reduced. The slashed rates will bring relief for the homebuyer who was postponing the decision to own a property.
One of the top executives of a huge property firms in the country said that this is a good move by RBI. The lowering of interest rates will improve the cash flow. With the housing loan interest rate slashed, this will facilitate the homebuyers to buy residential property. This move will be beneficial to the Indian Real Estate. He also said that this new low rates on home loans will benefit the new borrowers and not the existing ones. Old home loan borrowers will have to grapple with the previous rates.
Another important thing suggested by the top property company official is banks, which are the prime home loan providers in the country, should also allow existing borrowers to get this benefit. The banks should allow existing home loan borrowers to re price their loan interests. Another real estate expert said that this would boost the residential realty segment. The slashed interest rates will lower the EMIs for new borrowers.
There is also a cause of concern on this move showed by some property experts. If the lending banks do not cut the interest rates then the borrowers will not be benefitted.
Another expert welcomed this step and said that this will increase the consumption demand. The high interest rates were hindering the growth of demand for residential properties. With the increase in the construction materials prices, this is a good move.
This move is beneficial to homebuyers and property developers as well. The real estate developers were suffering with the cash crunch in the current period. The lowering of interest rates is significant for each side. To the homebuyers, this will reduce the cost of arranging funds. To the property developers, this will demand will increase. In the long run, this move will heighten the property demand.
If the banks remove the pre-payment penalty clauses, then this will cheer up developers. It will increase applications for fresh loans and consequently boost the market. The residential housing segment, which until a few years ago was doing well, will now improve with this move.
Shipra Sinha writes on behalf of 99acres.com, which is an online portal dedicated to meet every aspect of the consumers needs in the real estate industry. It covers information about all Real Estate property types including Houses for buy/sell & Rent for different Property locations like Mumbai Property, and india real estate etc.