Top Factors Pushing the Housing Loan Market in India
Irrespective of this recent economic downturn that India suffered from, home loan segment in this country is still projecting a 22% CAGR. There are several factors working behind the curtains to continue this growth of housing loan and meet estimated figures.
Factors of increasing housing loan market in India
- Reduced Home loan interest rates
In May 2020, when RBI slashed repo rate to 4%, it lowered home loan interest rates. Resultantly, availing the necessary funds at that point became easier for prospective home buyers. It has acted as a significant push to the home loan market in this country.
2. RBI’s Policy
The introduction and extension of the moratorium have also helped borrowers to deal with their EMI burden. It has also stimulated the home loan demands in the market. Also, the infusion of Rs.500 crore in the National Housing Bank is targeted to help home buyers further.
3. Affordable housing scheme
The introduction of affordable housing schemes like PMAY has also influenced the growth of home loans in India. It has presented an opportunity to every Indian to buy a home at affordable terms.
4. Lowering the eligibility and documentation Process
Financial institutions have enforced leniency in home loan eligibility and documentation process. They have reduced the number of documents required to get a loan and lowered the eligibility criteria to a certain extent. It has prompted future home buyers to avail a credit with ease.
5. Lowering of property tax rates and other fees
To encourage prospective buyers, local government bodies have also stepped up. Civic authorities have lowered the property tax rates and reduced the stamp duty and other processing fees needed for property registration. It has significantly reduced the total cost of purchasing a home, and encouraged individuals to invest in real estate.
Resultantly, the housing loan segment has also received a boost.
6. Offers from builders
Developers have also introduced several schemes to attract the attention of buyers. Such schemes include low processing fee, cashback offers, low booking amount, and several other customer-friendly benefits. It has also prompted individuals to invest in purchasing a home.
Along with these factors, the introduction of policies like the RERA Act brought the required transparency in this sector. It also introduced standardization and helped to regulate the price of real estate. It has also played a direct role in the rising demands of housing loan in India.