Housing loan borrowers are making the foremost of the present record-low rate of interest regime as indicated by a 42% on-year surge in demand for Balance Transfers (BT) and 26% rise for home loans within the half of 2021.
Loan Against Property (LAP) during this period has also witnessed a 20% rise. The soaring demand is essentially attributed to the Reserve Bank of India’s decision to stay the repo rate unchanged at a continuing 4%.
This has allowed many banks to supply home loans at interest rates less than 7%, which has also been a key driver in augmenting the demand for home buying.
The rising demand for home loans is in line with the increasing demand for residential property across key markets of India. Several initiatives by the govt , like keeping the repo rate constant and reduced stamp duty rates, are steps within the right direction. These measures are instrumental in boosting the general consumer sentiment, making almost 50% of the borrowers choose tenures but 15 years.
With Work from Home (WFH) becoming a norm, home buyers are now looking to shop for or upgrade to large configuration houses, and thus the demand is usually within the mid and above segments, said the report.
Pune, Hyderabad, Delhi, Ahmedabad and Mumbai are the highest five tier-I cities witnessing maximum demand for home loans. an identical trend has been recorded in tier-II cities like Jaipur, Indore Lucknow, Agra and Patna.
In terms of the demand for Balance Transfers, Mumbai, New Delhi, Pune, Hyderabad and Bangalore were the highest five tier I cities, and Noida, Ghaziabad, Indore, Visakhapatnam and Mohali the highest five tier II cities.
For LAP, Bangalore, New Delhi, Hyderabad, Pune and Chennai saw the foremost demand across tier I cities and Patna, Gurgaon, Jamshedpur, Lucknow and Faridabad for tier II cities.
By LNN (Liyaans News Network)