With the announcement by SBI chief about the Loan Policy for the Housing sector it is very clear that PSU banks are driving the Home Prices lower.
A unknown bracket of Rs.5lakh Home Loan was made most attractive with 8.5% rate and 10% margin requirements.
Though 5 lakh loan amiunt is unseen in the top 10 cities ... I believe it is very useful for small towns where 1BHK appartments will be mostly between 5 to 10 lakh.
This ideally means that government is encouraging very low cost housing and have no mercy for the developers who are not dropping their Prices.
Second bracket is 5lakh to 20 lakh is also ok with 9.5% interest rate and 15% Margin. Actually this bracker will meet the requirements of the Urban class but again for the Budget Homes.
Builders in last few years have been solely focusing on the Premium Luxury Home and 3/4 BHK houses targeted for IT setors, Reality investors and NRIs... but all this is changing.
At present in Pune builders are targeting 30lakh bracket to sell 2BHK houses but even this is impossible with 20lakh bracket and they will need to immediately come down to prices between 20 to 25 lakh.
Builders have been waiting for the home loan cut and now they are also sure that there is nothing much expected soon.. so they will need to rush and sell homes to all available people and this will create a stiff competition among developers and prices will automatically fall.
So overall a 15% drop in Home prices is clearly visible in next 6 months. Secondly All developers will not goto Tier 2 and 3 cities to acquire land for the low cost housing schemes.
But 5 lakh loan is interesting and will make many developers target this with homes prices between 5-7.5 lakh in Tier2 and 3 cities
