Slashed home loan rates set to revive the realty market

With the country now taking a huge leap towards development and with the new government focusing on creating affordable homes for every Indian in the next few decades, it doesn’t come as a surprise to see banks doing their bit to help potential buyers invest in homes. Private banks are now on a home loan rates slashing spree to attract buyers.

ICICI Bank is the latest establishment that has joined this bandwagon and has reduced its home loan rates by 10 bps (basis points). This initiative will not only strengthen the market (after the lull the real estate industry faced during the election season) it would also push home buyers to invest in homes. These techniques used by the banks will revive the realty scene across the country and will accelerate credit growth in terms of housing loans. The banks will receive an added advantage as the improving liquidity will ease the pressure of funds.

Although the slashed home loan rates are valid only for a limited period of time, this technique is sure to be a hit amongst potential buyers as the realty scene in Tier II cities is considered to be alluring according to a recent survey. And with buyers postponing their home buying decision in the hope of a stable government, the erosion in the loan rate margin will now urge potential buyers to consider buying a home as they would be able to save a considerable amount.

Besides just the banks and home buyers, developers and builders also stand to gain from this move. High property prices, high interest rates and most importantly the election lull had put the real estate industry in a tough spot. Incentives such as these would encourage hesitant buyers and will bring them back into the market.