Published date | 13 June, 2019

Home Loans has become better and attractive than ever -RBI June 2019 Rate Cut

Home buyers will be hoping for cheaper loans from banks now, which will have a direct positive effect on the demand for housing. However, the transmission of this rate cut to the home loan seeker via lower lending rates from the banking system may take some time.

Realtors are not sure of Rate Cut

For those searching to buy homes, it might be great news for them that the RBI repo rate has been reduced. This fact has brought great cheer and exuberance for homebuyers. But, they should be aware of one thing - the real estate sector, at the moment, is unsure of the fact that banks are cutting lending rates. And the recent experiences say it all.

Kanika Gupta Shori, Co-Founder and COO, Square Yards said that the rate cut off by RBI was a much essential and an essential reciprocation to the long-lasting demand. Banks now are expected to provide loans at a much cheaper and lesser percentage of interests. Thus, home buyers will be looking forward to cheaper and much affordable loans offered by banks. This will be in direct proportion to the housing demand. People would want to buy homes at such lucrative loan rates. However, she said that the process of operation of transmitting the application of the rate cut to all the customers via lessened lending rates might require some time.

This process surely will take a large amount of time as it is a strenuous task and is difficult to implement in a short span of time. Moreover, another drawback which can come forward is the level of implementation. Ground-level work may often not be done and only at the apex work might be shown to the media persons and agencies. Moreover, people often are not informed of these changes despite news channels and media reports being run at a good pace. They are often reluctant and often conform to the traditional norms of the old processes. 

Anuj Puri, Chairman, Anarock Property Consultants has mentioned about his wish that the apex bank should ensure that the entire process of transmission, in reality, happens at the ground level as there has not been much proof and evidence in recent times of a work like this actually happening. He also said that, “In the present scenario held up with the rise in NPAs and the rising NBFC crisis, things are not at all good”. He thinks that this task looks bleak and that fruition of this will take a long time. This rate cut can only prove beneficial and will have an actual impact over the housing industry only if the banks agree to reduce their current lending rates to the customers else it is not going to be beneficial for anybody.

Shishir Baijal, Chairman and Managing Director, Knight Frank India expressed that the real sector has been looking forward to such stimuli to boost their market and the momentum of success.

The decision to align the housing sector with the market for corporate loans with reduced rate cuts and international best practices will definitely strengthen the market for the housing industry and also will enhance better price discovery. The rate cut and this step is indicative of the fact that RBI is cognizant to the risks associated with economic growth. Lower rates of interest coupled with a reduction in GST rates for under-construction buildings should be beneficial for end-user demands. The real sector industry has been looking forward to such a step for a long time.


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Square Yards is a technology-enabled, global real estate aggregator and India’s largest player for primary residential real estate. It’s subsidiary Square Capital is one of the largest marketplace for secured mortgages in India. Square Yards platform offers an integrated consumer experience & covers the full real-estate journey from search, discovery to research, transactions, home loans and post-sales service – fully integrating buyers to an extensive network of 500+ partner real estate developers, and 90+ banks & NBFCs. Square Yards is led by accomplished professionals, ex-bankers, and Ivy school alumni and is backed by the competence of more than 2500 employees in 30 cities and ten countries.