Many NRIs settled in Europe, America and the Middle East who have bought real estate in India are considering refinancing their home loans.
Tag: Home Loan Interest Rates
As the countdown to Union Budget 2020-21 begins, the recent Iran-US stand-off and rising oil prices may throw a spanner in the works.
Anuj Puri, Chairman – ANAROCK Property Consultants
RBI’s decision to slash the repo rate by 25 basis point to 6.25 % is a welcome and unexpectedly positive move, given the sops that the recent expansionary budget gave to farmers at an additional cost of Rs 75,000 crore per annum.
It was also overdue, as this has been the first cut in a long time. It definitely augurs well for the real estate sector which also received a budget bonanza in the previous week.
Rate cuts give a substantial push to property buyer sentiments, and it was certainly high time for such a cut.
Home loan interest rates increased by as much as 5-7% in the last year because the RBI hiked its repo rates by 50 basis points over the same period. In other words, home loans had become a more expensive proposition.
However, the real estate market does not depend only on marginally improved buyer sentiment – there are larger issues that hold the sector hostage right now.
The liquidity issues post the NBFC crisis are a bigger concern. NBFCs and HFCs have seriously curtailed disbursements to developers.
Anuj Puri, Chairman – ANAROCK Property Consultants
- Miracles have been known to happen when a chequebook lies on the negotiation table
Stamp Duty Shocker
On the real estate market, upward revisions of any kind can doubtlessly hurt. Let’s take the Maharashtra Government’s proposal to levy a surcharge of 1% on stamp duty, effectively raising it to 6% from the existing 5%.
Such news, especially at a time when MMR’s real estate market was beginning to show some green shoots of revival with sales and new supply numbers rising, come as a shock.
This is a significant increase in the cost of real estate purchase that will hamper consumer sentiment – especially in the affordable housing segment.
On the one hand, the Government has rolled out multiple sops to boost affordable housing – and on the other, it is increasing the cost of properties. One can only hope that at least affordable housing is saved from this surcharge.
This is real and painful, and the impact is very hard to mitigate.