The Indian residential real estate market is expected to experience strong consumer demand during festival season with various banks, including SBI, offering concessional interest rates on home loans, according to real estate developers and consultants.
They also hoped that other public and private banks would soon announce their festival offers on mortgage interest rates and processing fees. The country’s largest lender, State Bank of India, on Thursday announced various festive offers for potential home loan clients, including a home loan tied to credit rating from 6.70% regardless of the Amount of the loan. Previously, a borrower with a mortgage exceeding Rs 75 lakh had to pay an interest rate of 7.15%. Anarock Group Chairman Anuj Puri said, “This is a hugely competitive decision by the SBI, and it removes virtually all previous limitations that applied to special interest rates for home loans. Instead of focusing only on budget housing, this new interest rate is genuinely democratic as buyers of any budget bandwidth will benefit. ”
Puri called the SBI’s decision “just at the right time” ahead of the holiday season. “This year we are likely to see a significant improvement in traction in the housing segment during this period. Dropping processing fees and occupancy related interest premiums is one level of savings. additional, ”he said. Puri expected other lenders to follow in SBI’s footsteps in order to remain competitive.
Vikas Wadhawan, group chief financial officer, Housing.com, Makaan.com and Proptiger.com, said SBI’s cut in mortgage interest rates will help the industry gain momentum. “The prices are already moderate and buyers will be able to save a little more money,” he added.
Amit Goyal, CEO of India Sotheby’s International Realty, said lower rates by some of the country’s major banks will serve as a catalyst for faster decisions. “SBI’s decision to offer a lower interest rate regardless of the unit price or loan amount is likely to benefit luxury buyers as well. With the upcoming holiday season, which is seen as auspicious by many Indians to do big ticket purchases, the timing of the interest rate cut could not have been better, ”he said. he added.
Raoul Kapoor, COO, Andromeda, said the cut in interest rates by the big banks should give a boost to the resurgence of the real estate market, especially during the peak holiday season. Signature Global Founder and Chairman Pradeep Aggarwal said: “The market is already on the rise, and we expect the recent SBI decision to help turn the tide and lead to a substantial increase in sales. Nayan Raheja, executive director of Raheja Developers, said the demand for affordable and mid-level housing will increase as affordability improves. “This will be a double dose of benefits for buyers as the developers have already kept prices on a leash, even as construction costs rise,” Raheja added.
Noida-based ABA Corp director Amit Modi hoped other private and public sector banks would also announce similar initiatives to rekindle market confidence. “The market has already started to see sales increase after May 2021, and the reduction in mortgage interest rates will further strengthen buying sentiment. We look forward to a faster recovery and hope the measure will accelerate the industry. so that it reaches pre-COVID levels earlier than expected, ”he added.
With the introduction of the new offer by the SBI, a borrower can now qualify for a home loan for any amount at a rate as low as 6.70 percent, which will result in a saving of 45 points. base (bps) which translates into an interest saving of over Rs 8 lakh, for a loan of Rs 75 lakh with a term of 30 years, SBI said.