The pandemic and the lockdown lead to the real estate industry of India crashing to the bottom. But things started picking up again post the lockdown regulations started getting lenient. The industry has been witnessing more and more buying and selling homes and higher home loan sanctions and disbursals.
The Reserve Bank of India (RBI) made an effort to bring back the lost shine of the real estate sector by reducing the repo rates. The reduction in repo rates is passed on to the consumers through home loan providers in reduced interest rates on home loans.
This is further confirmed by NoBroker.com, a home rental platform, through its report. The data states that there has been a rise in home loan applications by 25%-40% across various country cities. One of the reasons for this hike in demand is attributed to the shift in people’s preference to get into bigger houses to get accustomed to the prolonged work from home system.
According to the report, while the demand in Chennai and Hyderabad has increased by 40% in terms of the average home loans ticket size, Mumbai and Pune’s demand has seen a 30% increase.
Another reason for this increase in buyers is the support of the government. Recently, buying houses’ affordability has risen because of the initiatives, such as reduced stamp duty charges and the most reasonable home loan interest rates. This setup, coupled with lenders’ attractive offers, makes it easy for homebuyers to purchase a bigger house in the same budget.
NoBroker.com shares that there has been a 200% increase in loan disbursals during the period of December 2020 to January 2021 compared to the same period in the previous year. Also, it says that there has been 250%-300% in cities, such as Mumbai and Bangalore. Most of these disbursals are coming from mid-to-high range buyers where the point of interest is expensive and large properties.
Notably, many banks have reduced their home loan interest rates for borrowers to the lowest in a while. Some banks provide home loans at around 6.70% p.a. If you have plans to buy a house for yourself, it looks like the best time to go for it as long as you find the house that suits your taste. We don’t know how long the low-interest rates are going to be there. Why don’t you give it a thought?
For any clarifications/feedback on the topic, please contact the writer at apoorva.n@cleartax.in
