10 years low interest rates, discounts – banks, builders lure flat buyers

Hoping that consumers will ease their purse strings over the three-month period, lenders including State Bank of India, Housing Development Finance Corp, Kotak Mahindra Bank Ltd have reduced home loan rates by 15-60 basis points to 6.5%. Have given. 6.7% – the lowest level in a decade.

Lenders are hoping to capture relatively safe borrowers as the impact of the pandemic continues to threaten asset quality for many banks. A huge amount of liquidity has helped the rate fall after the Reserve Bank of India injected billions of dollars to protect growth.

Builders are offering discounts and gifts to home buyers, deferring payment plans and foregoing fees to tap a nascent revival in the property market. He joins several Indian companies – from consumer durables manufacturers to auto makers – slashing prices to spur demand during the festive season. Walmart-backed e-commerce giant Flipkart is offering up to 80% off some electronics as part of a big billion sale.

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According to Samantak Das, chief economist and head of research at property research firm Jones Lang, given the stagnant home prices and a market engulfed by the festive season, “the reduced home loan rate has been announced at an opportune time and will allow residential sales to be justified.” will encourage.” LaSalle Inc.

This idea is underlined by a recent JLL survey of six top Indian cities, which estimated that over 80% of 2500 respondents are planning to buy a home within the next three months.

Das expects home sales to increase by 30-35% in the second half of the year as compared to the six months prior to the festive offer.

Adhidev Chattopadhyay, an equity research analyst at ICICI Securities, expects “developers to post record sales booking numbers in the second half of FY22, led by new launches,” he said in a note.