Price of Property or The Interest Rate: Which is More Important?
May 23, 2017 Home Loan
The buying and selling of property are mostly triggered either by the change in interest rates or property prices. Since demonetization the bank vaults are overflowing with cash, leading to decrease in interest rates. Most of the banks have slashed their interest rates by 0.9 percent providing relief to the potential buyers. This has led to the industry wide debate, whether this will fulfil government’s dream of providing housing for all by 2022 or not.
We discuss it all here:
1.Reduced interest rates impact the property sales:
Lower interest rates imply that the buyer will have to pay less interest to the bank or the loan financing institutes. Lower lending rates give more saving to the buyer. With a certain amount of interest rates, the buyer ends up paying more money to the bank by the end of the loan term. If the interest is low then the buyer will be able to save a good amount of money that would have gone towards the interest.
Experts have always pointed it out that the interest prices are the setback of the Indian real estate, but it has very little impact on the buyer who intends to buy bigger homes as the property process will remain stagnant.
2.Reduced property prices:
The reduced property prices will mean that the buyer will have to take a lower housing loan from the bank or housing financing companies which will, in turn, mean fewer burdens on the pocket of the buyer. Lower monthly EMIs will help for future saving.
What does it mean?
The reduced interest rates and prices will both work on the buyer's interest and help in reviving the real estate market that has gone cold in past years. Even the government is working to reduce the prices of the property and the law makers are taking necessary steps towards it. It is expected that after RERA comes into force more buyers will show interest in the property buying.
We discuss it all here:
1.Reduced interest rates impact the property sales:
Lower interest rates imply that the buyer will have to pay less interest to the bank or the loan financing institutes. Lower lending rates give more saving to the buyer. With a certain amount of interest rates, the buyer ends up paying more money to the bank by the end of the loan term. If the interest is low then the buyer will be able to save a good amount of money that would have gone towards the interest.
Experts have always pointed it out that the interest prices are the setback of the Indian real estate, but it has very little impact on the buyer who intends to buy bigger homes as the property process will remain stagnant.
2.Reduced property prices:
The reduced property prices will mean that the buyer will have to take a lower housing loan from the bank or housing financing companies which will, in turn, mean fewer burdens on the pocket of the buyer. Lower monthly EMIs will help for future saving.
What does it mean?
The reduced interest rates and prices will both work on the buyer's interest and help in reviving the real estate market that has gone cold in past years. Even the government is working to reduce the prices of the property and the law makers are taking necessary steps towards it. It is expected that after RERA comes into force more buyers will show interest in the property buying.
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