Planning to buy a home in 2015? It's going to be a good time

Bangalore: If you are planning to buy a dream home in 2015 by acquiring a home loan and waiting for interest rates to come down as the time has finally arrived. Over the past few years, High inflation, sluggish home loan market and High interest rates are hitting the realty market very badly. Owing to the slowdown in the economy, many individuals who were planning to purchase a property were put off their decision. However; since the Makar Sankranti, many retail home loan borrowers are keeping an eye on expected RBI announcement of a cut in interest rate.

After a long haul; inflation has come down and advance in economic conditions and RBI is predictate to cut the interest rates in its fiscal policy review meeting as India’s key currency administrators and macroeconomic managers seek to jump-start Asia’s third-largest economy. This positive move will cheer up the real estate sector and stimulate the home buyers’ hopes as the home loan will be available at less expensive rates.  

On the other hand, the Central Bank also diminished the key lending rate or repo rate by 0.25 percent on January 15th, which will soon turn as cheaper rates. The repo rate, the rate at which RBI lends to bank remains at 7.75 percent and the rate was last altered in January. A lower repo rates slash banks borrowing costs and interest rates for final home, corporate borrowers and auto.

According to the last month data reveals that, the retail inflation value grew by five percent in December still one percentage less than RBI’s threshold level of 6 percent where the previous month noted a down trend of 4.4 percent.  India’s wholesale inflation rate inched up to 0.11% in December from 0% in November, but business leaders said the marginal rise should not dissuade the central bank to lower borrowing rates to help an economic revival.

Economists and Analysts like Morgan Stanley’s Chetan Ahya are optimistic of further cut in repo rates of another 25 basis point on Tuesday. The reduction of the amount that has to keep with central Bank or cash reserve ratio will improve liquidity and provide relief to lenders.