With Public Sector Undertaking (PSU) banks now offering attractive interest rates for home loans below Rs 20 lakh, the expectation was that this move would boost demand in smaller towns where housing costs are lower.
As securing a Rs 20 lakh home loan has become more affordable with a 9.5% interest rate, both buyers and builders are rejoicing, providing a much-needed break after the prolonged slump in the real estate market. Whether it's in Surat or Indore, realtors and potential homebuyers are celebrating as apartments in good localities are available at a low cost of Rs 1300 per square feet.
Swetaang Shree Maali, a Builder from Neo Associates (Indore), stated, 'For builders, this could improve our liquidity position as people will start buying.'
Buyers are also pleased, as they believe that the government’s move to reduce rates by state banks will enable them to fulfill their dreams of buying a home.
However, a look at the rates in emerging IT hubs such as Pune and Bhubaneswar in Orissa reveals a less optimistic scenario despite the attractive package announced by PSU banks. A two-bedroom house in these cities still necessitates a minimum investment of Rs 30 lakh.
Anup Mohapatra, President of the Real-Estate Developers’ Association, commented, '20-30% of the bookings come from single executives and employees in the IT sector, but now you can’t expect bookings from them because they face a constant threat of job loss.'
He further added that the package won’t benefit Pune residents as property rates are so high that one won't find anything for Rs 20 lakh. Hence, while the package is a liquidity boost for builders and a hope for a new home for some, many are still wondering whether the special package announced with much fanfare by the PSU banks will actually help them buy their dream home.