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- Despite the Plea By FM- Home Loan Rates to Rise
You are absolutely right that Finance Minister P. Chidambaram made a plea to the chiefs of all the Private banks - "not to increase the home Loan rates." But despite his plea Private Banks are set to increase the home loans by One Percent(That is quite Large). All this happened due to the increase in cost of funds.
The biggest players in the home loan market ICICI and HDFC banks, blamed the increase in cost of funds for the rise of Home loan rates. They said as the cost of funds will continue to rise the home loan rates will also increase.They said it will be hard to control the home loan rates in the future too.
If in this manner Home loan rates gonna rise then where are we really heading?CommentQuote0Flag
- Cascading effect
With rise of more than 2% in last 1 year, home loans have become very expnsive for people looking to buy their 2nd/3rd home, which would be let out and serve as an investment.
For people who want to buy their first home, no rate hike is going to deter them, as they will surely buy at whatever rates . But the deterence will be for the long term investors.
Another offshoot is the boomin sensex
People who make money there, are parking their funds in realty. So in effect some tapering of demand due to home loan hikes is taken care by the Boom Boom sensex.CommentQuote0Flag
- Investment property
I'd just like to raise an issue for discussion in the forum. As Mr. Ram quotes:With rise of more than 2% in last 1 year, home loans have become very expnsive for people looking to buy their 2nd/3rd home, which would be let out and serve as an investment.
As far as my knowledge goes.........are you refering to what in real estate terms is called 'Investment Property'.
With your experience in the industry, would you throw light on the 'Investment property' market in India?
How about a new thread on this friend.........CommentQuote0Flag
- Great thought
Great thought Sonia.:)
I think many like me would also be interested to know more on the investment property market in India.
But will the escalating property prices and rising home loan rates give a chance? If this trend continues, I think very few people will have the luxury to live in their 'own' house(luxury:though shelter/makaan is supposed to be the basic need).
Looking forward to the investment property thread.......as you said Sonia.