As the economic situation recovers from the pandemic lows last year and interest rates are at all-time low levels, demand for home loans in India rose 26 per cent during the first half of 2021, compared to the preceding six months.
A Magicbricks report showed that India has witnessed a 42 per cent surge in demand for balance transfers (BT).
There has also been a 20 per cent demand rise for loan against property (LAP) in during the period under review, showed ‘Magicbricks Home Loans Consumer Study – H1 2021’.
“The soaring demand has been triggered largely by the fact that the Reserve Bank of India (RBI) has kept the repo rate unchanged at a constant 4 per cent, allowing many banks to offer interest rates less than 7 per cent for home loans. This has also been a key driver in augmenting the demand for home buying,” it said.
Magicbricks CEO Sudhir Pai said, “The rising demand for home loans is in line with the increasing demand for residential real estate across key markets of India. Several initiatives by the government, such as keeping the repo rate constant and reduced stamp duty rates, are steps in the right direction.”
These measures have been instrumental in boosting the overall consumer sentiment, making almost 50 per cent of the borrowers opt for tenures less than 15 years, he said, adding that with factors like low interest rates, stable prices, and attractive payment plans, they are hopeful that the pent-up demand would soon translate into sales.