In some cases, the interest rate on home loans is as low as 6.5 percent.
Asked about the likely impact of his decision to cut mortgage rates for the holiday season on home loan disbursements, HDFC chief executive Renu Sud Karnad said lower interest rates are helping , but that this is only one of many variables in the recovery of demand. for home loans.
“Housing today is much more affordable than it has ever been. Over the past two years, house prices have remained more or less the same across the country while income levels have have increased, ”she noted.
Karnad further said people are moving to larger apartments due to the need for additional space after the outbreak of the COVID-19 pandemic.
“Working from home, home education and home entertainment due to the pandemic have also made people aware of the need for extra space at home,” she said.
Y Viswanatha Gowd, Managing Director and CEO of
Finance said the company is positive as there is a demand for ready-made homes.
“The pent-up demand is already there and even the labor market is recovering. Even the feelings of our customers are on the rise because the markets are opening up. The convenience of vaccination has given people more confidence to move around and physically go and see the properties and choose, ”said Gowd.
Gowd expects housing demand to remain strong during this festival season and beyond, particularly in the ready-made home segment and the affordable home segment.
Real estate consultant Colliers India, new CEO Ramesh Nair, said several banks in India cut mortgage rates ahead of the holiday season to encourage homebuyers.
“This will drive demand for housing across the spectrum – in the affordable, mid-range and high-end segments. The decor is already ready for an upturn in housing demand. need to own a house, ”he said.
Nair said the recent rate cuts by banks are a positive move for homebuyers and will encourage home buying on the close.
According to Nair, in August 2021, home loan disbursements increased 9.2% from the previous year.
“This is a good sign, and home loan disbursements will increase further in the coming months,” Nair added.
Karnad further pointed out that the demand for housing and housing loans has improved due to various positive factors.
“So a combination of factors, namely favorable demographics, improved affordability, lowest interest rates ever recorded on mortgages in India are pushing the demand for home loans,” said HDFC MD.
Karnad said feelings about the real estate market and housing finance have improved thanks to a strong pick-up in economic growth and lower-than-expected job losses.
“… much smaller job losses compared to what was feared during the pandemic, followed by a good resumption of economic growth and sentiment led to an improvement in confidence which is very vital for taking the bigger investment decision in life, ie buying a house, ”she observed. .
Regarding home sales and mortgage disbursements during the holiday season, Karnad said the holiday season is seen as a good time to buy a new home and it is boosting the real estate market in India.
“Having said that, we have seen healthy growth in mortgage loans not only during the holiday season but also during the normal course of the year …” she said.
V Swaminathan, CEO of Andromeda and Apnapaisa, said banks were looking to capitalize on this holiday season by offering home loans at record interest rates.
Swaminathan said the home loan market in the country has rebounded and recorded 9.6% annual growth in outstanding portfolio (PoS) in the third quarter of 2020-2021.
Meanwhile, as part of the festive offer, Bank of India on Sunday announced a 35 basis point cut in interest rates on its home loans and a 50 basis point cut in mortgage interest rates. auto loans, with the minimum rate now starting at 6.50 percent from 6.85 percent. percent on mortgage loans and 6.85 percent against 7.35 percent previously on auto loans.
The special rate, which is in effect from October 18, 2021 to December 31, 2021, is available to customers requesting new loans as well as those requesting a loan transfer, the bank said in a statement.
He added that processing fees are also waived for home and auto loans until December 31, 2021.