Active Stocks
Thu Mar 28 2024 15:48:07
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Money / Personal-finance/  Houses expected to get more affordable
BackBack

Houses expected to get more affordable

Home sales across six top cities in India may rise by 26% in the second half of 2014

Ramesh Pathania (Ramesh Pathania)Premium
Ramesh Pathania
(Ramesh Pathania)

Pune emerged as the most affordable among six cities in 2014, according to a recent report by Knight Frank India, India Real Estate Outlook (January–June 2014). The city saw 83% of new launches below the ticket size of 50 lakh. Similarly, 75% and 62% of the new launches in Chennai and the National Capital Region (NCR), respectively, were below the ticket size of 50 lakh. However, not surprisingly, Mumbai remains the most premium market, with 34% of total launches during 2014 being priced above 1 crore. NCR and Hyderabad followed at 23% and 20%, respectively.

House sales may get further boost with leading banks reducing the interest rates on their home loans. On Tuesday, State Bank of India had announced that it is cutting interest rates on home loans to 10.15% for all loan brackets (10.10% for women borrowers).

Punjab National Bank, too, cut rates to 10.25% for home loans up to 2 crore, and to 10.50% for bigger amounts.

What’s working in favour of retail homebuyers is that allocation of funds for mass market housing sector has increased as lending regulations by the National Housing Board and the Reserve Bank of India (RBI) have been eased. Banks have been asked to make loans eligible on a priority basis. RBI has stipulated that housing units priced at a maximum of 65 lakh in the six metropolitan cities of Mumbai, New Delhi, Chennai, Kolkata, Bangalore and Hyderabad may be considered as affordable housing. “This move is likely to uplift buying sentiment in these cities and revive the residential sector, which has been struggling with soaring unsold stock. With all of these new measures, the overall sentiment in India towards house purchase is likely to improve," said a Jones Lang LaSalle report, Monthly Real Estate Monitor, August 2014.

Despite having the lowest weighted average price among the six cities, Hyderabad has a large number of projects above the ticket size of 1 crore because the apartment sizes in most of the new projects are still on the higher side compared with other cities, said the Knight Frank report.

During the first half of the calendar year, the residential real estate market remained feeble both in terms of new project launches and absorptions. There was a decrease of about 32% in project launches and 27% decrease in absorption compared with the same period last year, according to the report by Knight Frank.

The incentives announced for the housing sector in the Union budget have improved homebuyer sentiment in the past three months, said the report. Thus, home sales across the top six cities in the country are expected to rise by 26% in the second half of 2014.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 27 Aug 2014, 07:01 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App