Property Plus

What is trending in the home loan segment

The Indian consumer may have said, “have money, will spend”, but the new resurgent young Indian is also saying, “can save, will invest”. Over the last few months there has been a surge in home loans taken by this segment of Indians, thanks to lower inflation, lower interest rates and better employment opportunities. The age group of 25 to 35 years has been active in owning a residential property and in this quest it has been actively borrowing too.

The lenders, particularly private banks and exclusive home finance institutions (HFIs), have seen a spurt in the loan off-take. While other asset classes such as equity, gold and debt are not faring as well as they should be, real estate has been the flavour of the season. There is no doubt that real estate has always scored over other asset classes among the young and the old alike.

As a city, Bengaluru has seen the highest surge in real estate activity and seeking home loans, and it can be attributed to the fact that the city has been the favourite for people from across the country to settle down in. The return on investment is also high compared to other similar cities.

Though most purchases have been for self-dwelling purposes, there have been several cases where the purchase has been made for the sake of long-term investment, which proves a point that the expectations of return on investment is high on the minds of such investors.

If one would look at the signs of Indian economy the inflation could moderate to about 5% and if this happens on a consistent basis it would lead to lowered interest rates regime, thereby taking the lending rates to below 9% (the present lending rate), and the real estate sector could be the biggest beneficiary apart from the banking and financial services sector.

With the Budget round the corner, if the Finance Minister doles out a few sops on taxation for the benefit of the individual tax payers and offers infrastructure status to the real estate segment, it would be a double bonus and the resurgence would continue unabated.

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Printable version | Feb 28, 2021 4:24:23 AM | https://www.thehindu.com/features/homes-and-gardens/what-is-trending-in-the-home-loan-segment/article8285270.ece

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