Hi All,
Since Govt had reduced the home loan rate for <5 lakhs and <20 lakhs would it really boost real estate? My understanding is that it'll leave minimal impact in RE sales bcoz
1) Since the average 2/3 BHK costs more than 35L, buyers will require more than 20L from Bank (assuming that most of us will not have 50% cash when buying a house) and hence they cannot utilize the reduction in loan rate
2) This reduction is only for new home loans and not for existing
3) This reduction will be available only till June 09'

Any other views?

Mahesh K
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  • Originally Posted by Maheshk
    Hi All,
    Since Govt had reduced the home loan rate for <5 lakhs and <20 lakhs would it really boost real estate? My understanding is that it'll leave minimal impact in RE sales bcoz
    1) Since the average 2/3 BHK costs more than 35L, buyers will require more than 20L from Bank (assuming that most of us will not have 50% cash when buying a house) and hence they cannot utilize the reduction in loan rate
    2) This reduction is only for new home loans and not for existing
    3) This reduction will be available only till June 09'
    Any other views?
    Mahesh K


    I would agree with you that since most of the homes at present are above the 20L limit, what you suggest is true. But this may apply to the outskirts of chennai and that would make things easy for the development of such suburbs. Hope it will be true. GOOD LUCK.:)
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