State Owned banks Cut Mortgage Rates
State owned Indian banks announced today that home loans of up to Rs 500,000 or US$ 10,000 would carry a maximum of 8.5 per cent interest whilst those in between Rs 500,000 to Rs 2,000,0000 (US$ 40,000) would incur an interest rate of 9.25 per cent .
Major real estate players did not react positively to the announcement that mortgage rates would be capped by state owned banks, saying that what has been proposed was inadequate, though they felt the measures could spur demand in smaller cities.
“Rate of interests are still very high… There will not be many takers. This package will give a miss to super metros, metros and Tier I cities, which are the major segments for demand drivers,” DLF Group Executive Director Rajeev Talwar said adding that the rate of interest should be between 7-8 per cent
Parasvnath Developers Chairman Pradeep Jain told the Business Standard: “The disappointing part is the rate of interest. We were expecting much higher cut in the rate of interest. “For over Rs five lakh loans, we were expecting 6 per cent and between Rs 5 lakh and Rs 20 lakh we were expecting 7.5 per cent, overall it will give a partial push to the real estate sector, particularly in the affordable housing segment.”
Unitech Managing Director Sanjay Chandra, differed substantially in his assessment however, hailing the package as an “excellent thing” that would boost real estate sector, the only major Indian real estate developer to seem satisfied with the measures undertaken by the public sector banks.
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