Interest Rate Cut Fails To Trigger Home Buying

Bangalore: To attract home buyers, real estate developers and banks give lucrative offers mainly during festive season. Similarly, this year also they have come up with offers where banks have reduced home loan rates by 25-30 basis points and real estate developers have come with discounts and freebies on ready projects as well as under construction projects, reports Priya Nair & Yogini Joglekar of Business Standard.

The festive season starts with Ganesh Chaturthi and will last till Diwali or may extend till the New Year. So, prominent banks including Allahabad Bank, Bank of Baroda, Central Bank of India, Indian Overseas Bank, IDBI Bank, Oriental Bank of Commerce, Punjab National Bank and Union Bank of India have reduced their interest rates by 25-30 basis points for 25-50 lakhs on home loan.

But, the measure taken by developers and banks is not enough to attract buyers as the property prices are still very high. So to buy a property one has to make 20 percent down payment. According to a recent Knight Frank report, about 80,000 unsold inventories lying in the financial capital, Mumbai.

Apart from down payment, the buyers have to pay registration and stamp duty independently from their own pocket. Besides, some builders charge separately for parking space and so forth.

Alternatively, developers are also doing their part to sell their unsold volumes and make profits to start new projects. Developers are offering freebies like foreign trips, gold coins and so on to attract buyers.