Home loan rates at all-time lows: a once-in-a-lifetime chance for homebuyers

India’s residential real estate sector would experience more outstanding sales in the coming months if improving home affordability is any indicator.

The present home loan rates are at their lowest in four decades, and they are likely to stay low for another six to twelve months, making this the perfect time for homebuyers to buy. Although the economy and real estate have increased, the second wave of COVID may impact the market. The extent of the impact cannot be anticipated at this time, although the chances of it being little are good.

The finest purchasing opportunity for homebuyers has been prolonged because of factors such as the RBI pouring much-needed liquidity into the market, as well as many governments and developer concessions like stamp duty exemptions. Banks are increasingly discriminating between strong and poor developers for lending purposes, allowing them to improve balance sheet efficiency, prevent over-leveraging, and stay well-capitalized.Housing Loan

The benefits of India’s coronavirus immunisation campaign may be observed in the country’s property market as the campaign continues. Following a record low in the previous two quarters due to a sharp spike in the number of infections, home sales in major Indian housing markets rose nearly 70% in the third quarter, and new supply also rose. Despite the general sadness, house prices have been increased in key markets, indicating that consumers have recognised the real estate value and are keen to take advantage of the low home loan interest rates. Indeed, interest rates have significantly impacted revenue growth as expected and received by the end-user. 

If higher housing affordability is a sign of this, the Indian housing market will see sales surge in the coming months. The supply of new homes remains affordable and in the middle segment as developers try to capitalise on the high pent-up demand. It is speculated that residential property demand in India could be hurt due to the surge in new coronavirus cases in India. As a result of the increase in cases, much of India, particularly Delhi, Maharashtra, Rajasthan, Odisha and Gujarat, is now subject to restrictions including partial closings, weekend closings and night curfews. The second wave of the Covid-19 pandemic is a cause for concern in this sector. It wouldn’t be a problem if logistics and supply chain support and migrant workers were available locally. 

Currently, homebuyers can take out home loans for as little as 6.65% annual interest, although the RBI has decided to keep the repurchase rate unchanged. The mortgage loan was 8% which is a significant difference. You should make a quick decision about buying a home as the situation could change if the banking system changes. Despite the RBI’s decision to keep policy rates unchanged on April 7, 2021, the SBI raised mortgage loan interest rates in April, suggesting that banks may move away from the current regime of historically low-interest rates.

Due to the impact on demand, residential price growth has also slowed over the past year. Overall, the market is excellent for homebuyers to realise their dreams before the market comes back on the market. The old interest rate regime and the developers are likely to increase prices the next time they happen 6-12 months.

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