In­ter­est rate cuts add to Navra­tra cheer

As EMIs come down, de­vel­op­ers are also ‘gift­ing’ wash­ing ma­chines, LED TVs and big dis­counts to home­buy­ers

HT Estates - - NEWS - Van­dana Ram­nani

Navra­tras are con­sid­ered aus­pi­cious for prop­erty pur­chases and dur­ing the fes­tive sea­son this year too prop­erty de­vel­op­ers are dol­ing out the usual LED TV sets, wash­ing ma­chines and in­cen­tives such as dis­counts of ₹ 500 per sq ft on ev­ery apart­ment, free power backup as well as in­no­va­tive sub­ven­tion schemes.

Slash­ing of repo rates by the Re­serve Bank of In­dia be­fore the fes­tive sea­son by 50 ba­sis points ( bps) will also have a pos­i­tive im­pact on the pur­chas­ing power of home­buy­ers and ease the bur­den on de­vel­op­ers fac­ing a liq­uid­ity crunch. “It is heart­en­ing to note that home loan rates have al­ready started to come down. So, with re­duced loan rates, flex­i­ble prop­erty prices and at­trac­tive schemes cur­rently avail­able in the hous­ing sec­tor, this would be a good time to get into the mar­ket,” says AS Si­vara­makr­ish­nan, head – res­i­den­tial ser­vices In­dia CBRE South Asia Pvt Ltd.

A c c o r d i n g t o K ave r i R Desh­mukh, vice pres­i­dent, re­search, Knight Frank In­dia, in­fla­tion, tamed to con­sid­er­ably lower lev­els from what it was at a year ago, has now pro­vided room for rate cuts. This June, the repo rate was cut by 25 bps. Key rates were again trimmed by an­other 50 bps to 6.75% this Septem­ber.

In­dia’s fes­tive sea­son gen­er­ally ac­counts for around 40% of both an­nual new launches and sales in the res­i­den­tial seg­ment. In 2010 and 2012 there were around 2 lakh newly launched

units and around 1.5 l akh unit sales be­tween Septem­ber and De­cem­ber across eight c i t i e s ( MMR, Pune, NCR, Ben­galuru, Kolkata, Chen­nai and Hy­der­abad).

“The years 2013 and 2014, how­ever, saw a sub­stan­tial de­cline in new launches dur­ing fes­tive sea­son with 2014 not even reach­ing 1 lakh and sales shrink­ing to just above 90,000. Hence, RBI’s ini­tia­tives may bring in some pos­i­tiv­ity this fes­tive sea­son,” Desh­mukh says.

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