karan nice blogs: 11/01/2011

Wednesday, November 30, 2011

Home loans grow despite rising interest rates, property prices

High housing prices in some parts of the country and the increasing interest not dampened the appetite for home loans in the first half of the current fiscal year (April-September 2011), go through the data of the National Housing Bank and the Reserve Bank of India.

In the first six months of the current fiscal year, the collective disbursement of housing loans by 54 HFC (housing finance companies) 10 per cent higher at Rs 49 458 crore against Rs 44 870 crore in the corresponding period last year.

Also in the first six months of the current fiscal year, the collective disbursement of housing loans by 47 scheduled commercial banks to Rs 20 779 crore to six percent from Rs 16 221 crore in the corresponding period last year.

"Due to the availability of affordable houses on the outskirts of the metros and in Tier II and Tier III cities, the demand for housing finance was good," said Mr RV Verma, Chairman and Managing Director, NHB.

First-time buyers looking for affordable homes is not deterred by high interest rates, if they are able, willing ownership of dwellings, are to get Rs 25 lakh to prices, he added.

NHB, the regulator and supervisor of HFCs and banks to provide refinancing for home loans.
Lending rates up

With the RBI increasing the rate at which it lends to banks daily allowances (repo rate) six times since the beginning of the current fiscal year to satisfy the rising tide of inflation, the latter greatly increased their lending rates.

In the financial year so far, the central bank has raised its key rate from 6.75 percent to 8.50 percent. Banks responded to the tightening of monetary policy by re-adjusting their base rates upward from 8.25 to 9.50 percent band as on 1 April 2011, by 10 to 10.75 percent now.

Banks place their actual lending rates on loans and loans with reference to the base rate and by including such other custom charges deemed appropriate.
House prices rise

Property prices on the latest RBI report on macroeconomic and monetary developments have increased amid falling transaction volumes in the April-June 2011 to 12.

The RBI's quarterly housing price index by about 8 percent for the second consecutive quarter, increasing at an all-India level, while the transaction volume index that dropped sharply in the July-September and October-December 2010 to 11 Period decreased by approximately 7 percent in April-June 2011-12 period.
Residex movement

NHB's Residential Housing Price Index (Residex) shows that residential property prices in six cities in the July-September 2011 quarter compared to the previous quarter (April-June 2011) increased.

The city that the maximum increase has shown, Pune (13 percent) of Chennai (9 percent), Mumbai (7 percent), Delhi (5 percent), Jaipur (2 percent) and Bangalore (followed by 1 percent).

There are 9 cities showed that lower prices over the previous quarter, with a maximum decrease of Kochi (-9 percent) of Hyderabad (-8 percent), Bhopal (-7 percent), Surat (shown followed -7 percent), Faridabad (- 6 percent), Ahmedabad (-4 percent), Lucknow (-4 percent), Patna (-3 percent) and Kolkata (-2 percent).

The Residex pursued choose the real estate prices in 15 cities.

The Residex considered developed for residential real estate price trends in different places and zones in each city by classification for the purpose.

"The continuing rise in housing prices in cities like Mumbai, the attributable interest of investors.

"In cities like Chennai and Pune, the increase could be due to genuine consumer demand. In the case of the nine cities where prices have fallen, there is a clear indicator that the demand due to the prevailing high prices softening" said Verma.

article source :- http://www.thehindubusinessline.com/industry-and-economy/banking/article2671974.ece?ref=wl_industry-and-economy