| 'Feel Good' for Customers, Developers and Banks, this | | | | ploy on the banking sector; it is finally the Indian real |
| Diwali… | | | | estate industry and consumers who would be |
| Good times waiting for indian Real Estate. | | | | benefited of the same. |
| Hard-pressed with the falling demand, and slackening | | | | Home loan interest rate is the biggest and the most |
| growth numbers, Indian banks have finally slashed | | | | critical factor that drives Indian real estate, and the hike |
| interest rates on home loans. Interestingly, the banks | | | | in interest rates, of about 5-per cent in the past couple |
| have appropriately chosen the period of Diwali to cut | | | | of years, has hammered down the industry, a senior |
| the interest rates and treating their move as a festive | | | | official of a construction group pointed out. |
| offer. | | | | Further, as per the recent report by Assocham 'Impact |
| The bankers, on the positive note, are keeping their | | | | of Rising Home Loan Rates', demand for the residential |
| fingers crossed and expect that the initiative would | | | | India Real Estate fell down by an average 20 per cent |
| encourage people to arrive at a decision of buying a | | | | in the past 12-months, owing to the sharp rise in |
| house. On the other hand, real estate developers also | | | | interest rates. Therefore, softening of interest rates |
| feel that the cut would probably revive the ailing | | | | would bring back life in the industry. |
| residential property markets, and after Diwali, the | | | | Till this moment, India's biggest public sector bank SBI |
| picture would be far clearer as to how markets would | | | | had dropped its interest rate on home loan by 0.75 per |
| behave further. | | | | cent to 10.50 per cent. Private sector major HDFC also |
| In actuality, it is in the interest of banks only to reduce | | | | has also reduced the rate from 11 per cent to 10.50 per |
| rates, as the growth rate in home loan lending segment | | | | cent. ICICI, Bank of Baroda, etc. have also followed the |
| has been on downslide over the past 3-year. | | | | suit by reducing their lending rates between 0.50 and |
| Earlier to fiscal year 2005-06, Indian banks were | | | | 1.00 per cent. |
| posting year-on-year (YoY) growth rates of 49.5%, | | | | Earlier, the rates had risen from the range of 6-7 per |
| 73.9% and 48.6% respectively, however the same fell | | | | cent of 2000-2002, to as much as 11-14 per cent in |
| down to 29.1% in 2005-06, and 26.6% in 2006-07. In | | | | 2005-2007. Such a steep rise definitely put a deep |
| absence of rate-cut, this number was estimated to | | | | impact on the pockets of the people intending to buy |
| further go down to 15-17% in the current fiscal. And in | | | | residential properties by taking home loan, and the |
| this case, the decision to curtail interest rates was | | | | bearing was quite visible on the demand for housing |
| inevitable, bank officials admit. | | | | property, across the country. |
| Meanwhile, whatever may be the implications of the | | | | |