Bangalore’s low interest rates attract property purchases

Bankers and builders recommend purchasing residential units in Bangalore with the current low-interest-rate situation

Bangalore city skyline in the residential zone of Bangalore, India. NoppasinWongchum/Shutterstock

The city has experienced moderately good home loan purchases, alike times prior to the COVID-19 pandemic, with low-interest rates in the property market, reported The Times of India.

Managing director at Canara Bank LV Prabhakar stated, “Canara Bank is offering interest rates as low as 6.9 percent. We have seen our third-quarter revenue from retail banking increase 51 percent to INR9,664 crore (USD1.3 billion) on good traction in our home loan, agriculture and SME portfolio.”

Most major banks are offering a record low of home loan interest rates, around 6.7 to seven percent. The three largest Indian banks: SBI, ICIC, and HDFC are offering only 6.9 percent. These rates are expected to remain stable, particularly since the Reserve Bank of India has set the repo rate fixed as part of its monetary policy.

Prabhakar added, “we’ve seen good growth in housing at 13 percent, with enquiries from Bengaluru, Chennai, and Delhi. Our Retail Assets Hubs (RAHs), set up to focus on housing and educational loans, are doing well, and have pushed our home loan portfolio to INR60,000 crore.”

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Banks say that Bengaluru is one of the hidden gems for the property market that has actually been dull throughout India due to the profusion of speculative investors during these few years.

Managing director at Shriram Properties M Murali mentioned that for the past three months, the firm has achieved satisfactory sales with an increase in conversion rates from eight percent (pre-COVID days) to 24 percent.

Managing director of Century Real Estate Ravindra Pai added that it is a good time to invest in real estate seeing the dropped fixed deposit rates and low home loan interest rates.

“With real estate demand gradually returning, especially in the wake of developers’ discounts and freebies and reduced stamp duty charges, lower repo rates would have given an added boost to the ongoing festive season,” said Anuj Puri, chairman of property consultancy Anarock.