If you have been among those who have been waiting for the 'right' time to buy a home,now maybe that time. Interest rates have been falling, making your loan cheaper. Not just that, property rates have visibly started falling too. Wealth takes stock of whether it is indeed the right time to buy a home!
Property prices are falling
Project developers have been facing liquidity problems, thanks to the slowdown, and are finally cutting down prices. According to the December 2008 figures released by Knight Frank India Pvt. Ltd, property rates are down by 20-30 per cent from peak (that is mid 2008). Narain Corp, Property Consultants and Realtors, also estimate that rates have already gone down by 10 to 20 per cent since the beginning of 2009.
Home loan are also getting cheaper
Interest rates have been falling steadily. Call money market rates have dropped to 2-3% and bulk deposit rates have fallen sharply. This indicates liquidity in the system which would mean that interest rates are likely to come down a little more.
Many lenders such as State Bank of India (SBI), HDFC Ltd., LIC Housing Finance, etc. have reduced their loan interest rates. Bank of India is also expected to reduce its interest rates by 50 basis points. Then, have interest rates bottomed out?
Chairman and Managing Director of Punjab National Bank, KC Chakrabarty says, "Lending rates will come down by a maximum of 50 basis points."
Principal Economist, CRISIL, DK Joshi explains, "A further rate cut (by Reserve Bank of India) is expected in the next two to three months. There will be more action once the Central Bank announces the annual monetary policy by the end of April 2009."