Home Loan Rate inTerest Rates: Burdening the Masses?

Higher home loan interest rates will soon become a fact of life from the coming month, thanks to the announcement of the Reserve Bank of India (RBI) for increased repo rate and Cash Reserve Ratio (CRR)

While expectations of a rise for home loans between 0.5% and 1% in the interest are predicted by home loan lenders, some have even indicated a jump of 2%.

This will add to the monthly investments’ increase for an average home seeker who already feels burdened with overall costs of buying a house.

With the cost of living already going up by rising inflation standards, don’t we need an innovative thinking for housing loan solutions offered by government authorities or the developers that may save us from the both financial as well as psychological pressures?

Are Property Prices Coming Down Any Soon?

Property consultant Knight Frank expects further correction in home prices in India. Their recent report suggest that since the volumes of property transactions are going down, hence the asking price for property will also go down. Additionally, over-supply of property is posing as a major reason for the slow down in Real Estate prices.

Recent media reports have also suggested the same trend. Reports suggest that Real Estate Prices in Mumbai, Bangalore, Pune, and National Capital Region have corrected 15-20% in the first quarter of this year. Market-watchers say that this trend will be repeated across the Tier II cities and suburbs too. No wonder property developers are wooing prospective users with all sorts of offers. Some are even offering lower EMIs for flats while some are offering goodies like cars along with property. Still others are wavering off the stamp duty prices.

Are the property prices coming down in your area? Is the property slow down really impacting the end user in a major way? Should the home seekers cheer for some reasons? Is there a possibility of a market dive? Or is this a temporary phase in the housing segment?