Banks and builders hope for a resumption of festival season in India, Real Estate News, ET RealEstate
In anticipation of consumers easing their purses over the three-month period, lenders including State Bank of India, Housing Development Finance Corp., Kotak Mahindra Bank, cut mortgage rates from 15 to 60 basis points, between 6.5% and 6.7%. – the lowest level in a decade.
Lenders are hoping to capture a relatively secure set of borrowers, as the lingering impact of the pandemic continues to threaten the asset quality of many banks. The rate cut was aided by a huge amount of liquidity after the Reserve Bank of India injected billions of dollars to protect growth.
Builders are offering discounts and giveaways to homebuyers, postponing payment plans, and waiving fees to tap an emerging real estate market recovery. They are joining a slew of Indian companies – from manufacturers of consumer durables to auto makers – cutting prices to boost demand during the holiday season. Walmart-backed e-commerce giant Flipkart is offering discounts of up to 80% on select electronics in a billion dollar sale.
Given stable house prices and a market filled with holiday offers, “the announcements of reduced mortgage rates are timely and will kick-start residential sales,” Samantak says Das, chief economist and head of research at real estate research firm Jones Lang. LaSalle inc.
This view is supported by a recent JLL survey of six major Indian cities which predicted that more than 80 percent of 2,500 people surveyed planned to buy a home within the next three months.
Das expects the festive offers to increase home sales by 30-35% in the second half of the year from the first six months.
Adhidev Chattopadhyay, equity research analyst at ICICI Securities, expects “developers to post record sales figures in the second half of fiscal 2022 thanks to new launches,” he said in a note.