Interest rate cuts add to Navratra cheer
As EMIs come down, developers are also ‘gifting’ washing machines, LED TVs and big discounts to homebuyers
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.