Banks will likely to reduce the rates of home loans in the coming financial year. As an outcome of which probable homebuyers will get a chance to buy a bigger home than they thought of earlier, affirms the market speculation. In conversation with the chairman of SBI Arundhati Bhattacharya states, as an aftereffect of demonetarization banks are now going through the cash crunch and the interest level of home loans will reduce by a fourth. If you want to buy commercial property in Kolkata, postpone your investment program for couple of months more.
The president of the Bengal chapter of Confederation of Real Estate Developers’ Association of India (CREDAI-Bengal), Nandu Belani, foresees the EMI of home loans becoming more affordable over the next 12 months with a succession of interest rate cuts. “We will know about the exact situation post demonetization when the Centre comes out with firm numbers. Interest rate cuts should happen early next year, followed by another round after the Budget. From 9.25-9.75% at present, home loans should be available at 7-7.5% around this time next year,” said Belani. He also pointed out, “If someone had budgeted an EMI of up to Rs 32,000 for a loan of Rs 30 lakh, the person can now take a loan of Rs 36 lakh. The enhancement of a person’s loan capacity by 11-12% can translate to the person being able to afford a bigger home or more conveniently located property.”
For instance calculating abruptly in a 15 year term a 25% lesser of interest rates could see EMIs on Rs 1 lakh will save of Rs 100 a month. In a 20-year loan term, the saving can be almost doubled the amount. On a loan of Rs 30 lakh of 15-year tenure, the snowballing savings on EMI might be in excess of Rs 5,000. Experts are hopeful that with the reduction of home loan EMI rates will uphold a steady balance. Developers might get a profitable deal as they will be able to deal with the interesting EMI cut rates and also have an access of cheaper capital. Simultaneously they are waiting the micro market condition to get back into business. With the development of the micro market like Tollygunge, Garia and New Town developers are expectant to see some optimistic sentiments in the real estate market.
The former president of Bengal CREDAI Sushil Mohta stated, “For the past three years, there have been cost increases but no price hike. When new projects are launched, new costs will be computed. I expect a marginal hike in prices because no one wants to turn prospective customers away.” “Now that RERA is in place, there will be no soft launches. Developers have to wait for all the clearances to launch a project and that will mean an increase in compliance cost as one has to pay interest on the holding cost,” Mohta clarified.
From the developers’ perspective this will denote a huge liberation to strained builders who are either in the unification or rat on form. Mohta does not expect new projects to be launched till 2018 as developers are mortified of making new development till they take hold of the trade in of the Notified Real Estate (Regulation and Development) Act, 2016.
By LNN (Liyans News Network)