Drop In Lending Rates Positive For Property Sector

kishor pate1Kishor Pate, CMD – Amit Enterprises Housing Ltd:

Some of the leading banks have set the score by picking up on the RBI’s signals and reducing their lending rates by between 0.15-0.25 basis points. Several other banks have now followed suit. I expect this to be only the first of more reductions to follow. There is invariably a lag between the directives given by the RBI with regards to lowering lending rates, and banks complying with these directives. It is encouraging that these banks have taken the initiative, leaving other banks with little option but to follow suit. The housing loan segment is an extremely competitive one, and it is noteworthy that home loan disbursements in the Pune region had reduced significantly in recent times. With this positive development, we expect the rate of loan purchases via home loans to begin picking up in Pune, which is a very cost-sensitive market.

arvind jain1Arvind Jain, Managing Director – Pride Group:

It is very encouraging to see that several banks are complying with the RBI’s strong indications for the need to reduce their lending rates. This will have a favourable effect on sentiments currently prevailing in the housing sector, which have been dampened in the recent past. Home buyers have been shying away from pressing the commit button on property purchases, and have preferred to wait for encouraging signals. Sales in Pune have stabilized over the last three quarters, and the most momentum being seen primarily in the budget homes segment. This strongly indicates that the market is skewed towards affordability, and reduction in interest rates is a critical factor in affordability. I expect sales momentum to start picking up visibly, and also believe that more rate cuts will follow on the heels of the stronger economic signals being felt in the country.