What are the developers doing for the real estate customers at the current time?
To lessen the impact of the rising interest rate regime on potential homebuyers’ affordability levels and to promote the continuation of the strong sales momentum, real estate developers have started to implement mitigation steps.
Housing sales have surpassed pre-pandemic levels and, in certain important markets, reached unprecedented levels as a result of historically low loan rates over the past two years. However, the interest rate cycle’s reversal is quickly becoming a major source of worry for property sales.
By regulating the cost of interest on home loans, real estate firms like Tata Housing, and Lodha Developers are stepping in to shield homeowners and sales from the rising interest rate regime. According to real estate brokers, a number of other builders intend to give customers this kind of choice.
For a year, Tata Housing will set the interest rate on house loans at 3.5 percent for buyers at nine of its projects in seven different locations throughout the nation, including Mumbai, Delhi-NCR, Bangalore, Chennai, Kasauli, Goa, and Kochi. The loan’s interest rate will only be 3.5 percent, and the corporation will take care of the balance payment. The deadline for this promotion is September 15.
“Following the little increase in the repo rate, house loan rates are rising, which has affected the sentiment surrounding home ownership. A historic residential real estate transaction occurred as a result of decreasing lending rates during the past two years, according to Agnayi Realtors and Infrastructure MD and CEO Ajay Taneja. In addition to making it possible for homebuyers to invest in residential real estate, this program will persuade potential buyers to go ahead and make the purchase.
Additionally, Lodha Group, for its customers, has fixed interest rates at 6.99 percent until 2024, saving them about 1.5 percent over the current home loan rates. With this program, Lodha hopes to protect homebuyers against the ensuing rise in repo rates and the projected rise in interest rates on home loans.
The “interest locked” plan will provide stability to Indian buyers for the ensuing 24 months and pay off up to 1.5% of their home loans. The rates fell over the previous two years. With this program, we hope to maintain for homeowners the lowest prices in roughly more than a decade.
Industry experts predict that the financial assistance offered through these efforts would help homeowners weather the rising cost of home ownership and enable developers to turn demand into sales.
Since May, the Reserve Bank of India has increased repo rates by 140 basis points, and following the first two increases in May and June, lenders have already increased the rates for housing loans. Following nearly two years at a decade low of 6.6 percent, house loan rates are currently circling about 7.4 percent.
Prospective home buyers’ affordability decreases by around 11% as a result of the cumulative rate hike up till Friday, assuming full transmission, from being able to buy a home worth Rs 1 crore to Rs 89 lakhs at this time.
Due to the stretched affordability of homebuyers, developers are putting out such measures to assist purchasers as well as to ensure that the momentum in property sales continues and are willing to contribute financially to that end.
