Reduction of interest rate - impact on real estate. - Our view
Vakkachan George, Managing Director, KCC Homes
The newly introduced reforms in the financial sector by the Govt. of India have brought down the interest rate of savings bank account to an all time low figure of 3.5% and subsequently, the interest rates on home loans have also been cut down to about 8.5% per annum. These rates on home loans are expected to be reduced further as well.
These two factors will have a very positive impact on real estate. It is estimated that compared to the other parts of the world, the number of people choosing real estate as an investment option is very low in India. But owing to the rate cuts on SB account as well as home loans, real estate will now become one of the major streams of investments.
The demand of gated and community living has also increased over the past few years because of the safety, security and amenities they provide. The rental income from such properties for its owners is much more than the SB account interest and many people are now taking to buying apartments and villas for the purpose of renting out as an investment channel.
All the said factors put together, the situation in India is currently on the favourable side for the builders as well as real estate investors.
The elastic and realistic prices of KCC’s projects make it an easy and attractive investment option, especially on the rental aspect. Many of the salaried segment employees have shown great interest in our projects, especially in our ready to occupy apartment, Spring Dale on a rental perspective for its proximity to KE School and Medical College.