Low buyer's sentiments in the real estate sector despite a dip in the home loan interest rates has led a sharp decline in home loan growth.
According to the Centre for Monitoring Indian Economy (CMIE), home loan growth in April-October fell down by 32.7 percent from a year ago, one of the biggest declines in the last five years. In 2016, home loan growth was down 4.27 percent, while in 2015, it was up 26.89 percent.
Over the past two years, the interest rate on home loans has come down by 150-200 basis points, said the report. A basis point is one-hundredth of a percentage point.
Major financial institutions have lowered their interest rates. In early November, the State Bank of India announced its plans to offer the cheapest home loans by implementing a five-basis point reduction in margin cost based lending rate (MCLR rates). The country’s largest lender bought down the rate to 8.30 percent.
Many developers believe that weak consumer sentiment stems from the impact of three major events or reforms made by the government to either improve India's economic growth, fight black money and or simplify tax.
According to the Centre for Monitoring Indian Economy (CMIE), home loan growth in April-October fell down by 32.7 percent from a year ago, one of the biggest declines in the last five years. In 2016, home loan growth was down 4.27 percent, while in 2015, it was up 26.89 percent.
Over the past two years, the interest rate on home loans has come down by 150-200 basis points, said the report. A basis point is one-hundredth of a percentage point.
Major financial institutions have lowered their interest rates. In early November, the State Bank of India announced its plans to offer the cheapest home loans by implementing a five-basis point reduction in margin cost based lending rate (MCLR rates). The country’s largest lender bought down the rate to 8.30 percent.
Many developers believe that weak consumer sentiment stems from the impact of three major events or reforms made by the government to either improve India's economic growth, fight black money and or simplify tax.
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