Interest rate cut on the cards
Mar 29, 2014
Source : The Times of India

 

BANGALORE: The Reserve Bank of India (RBI) is scheduled to announce the annual monetary policy for 2014-15 on April 1. Going by the present macro and microeconomic factors, the RBI is likely to cut the key interest rates marginally.

The high inflation rate, which was a major concern for the RBI, is showing signs of moderation. Although the inflation rate has eased both in the Consumer Price Index (CPI) and in food prices, the RBI is expected to be a bit cautious while going in for key rate cuts. The RBI has to consider a host of factors – primary being the inflation rate. It also needs to consider the growth rate, stronger rupee, and its impact on exports.

In its third quarter review of the monetary policy in January this year, the RBI raised the repo rate by 0.25 percent to eight percent in a bid to bring down the inflation rate. According to estimates, the economy will expand 4.90 percent in the current fiscal ending March 2014, up from 4.50 percent recorded in the 2012-13 fiscal. Growth in the first nine months (April-December 2013) was 4.60 percent. The economy must expand by 5.70 percent in the January-March 2014 quarter to achieve the estimated GDP expansion of 4.90 percent in 2013-14.

The Wholesale Price Index (WPI) based inflation rate dropped to a nine-month low of 4.68 percent, while the retail inflation rate slowed to a 25-month low of 8.10 percent in February 2014. On the back of strong foreign investor inflows, recently the stock market barometer BSE Sensex jumped by more than one percent to log a new all-time high, while the rupee appreciated 24 paise to trade at Rs 60.65 against the US dollar.

Home loan rate outlook

The outlook for home loan interest rates depends on the market interest rates. Over the last few years, with the high inflation rates and the tough stand taken by the RBI in its credit policies, there was no relief for home loan borrowers.

Considering the current economic factors, prospective borrowers can expect the interest rates to come down marginally in the short term. In order to push growth in the GDP, the RBI may cut the key interest rates for the time being. In future, depending on the inflationary pressures, the RBI will go in for a gradual reduction in the interest rates over the coming quarters. This way, it will be able to monitor the impact of the interest rate cuts as well.

Accordingly, the interest rates on home loans will come down in the near future. Borrowers going in for a floating rate will benefit from the expected rate cuts in future.

Latest Realty News

North Bangalore: An emerging commercial hub
Mar 29, 2014
BANGALORE: Interest in real estate peaked in north Bangalore with the setting up of the international airport in 2008. The as yet largely unexplored region boasted sizeable tracts of land at significantly lower prices. This helped the growth of commercial space in the region. Connectivity through the Outer Ring Road (ORR), the Hebbal flyover and the new expressway over Bellary Road has brought areas here into the spotlight due to easy access.
Demand for houses declines in third quarter
Mar 29, 2014
DELHI: The slowdown in economy coupled with rise in interest rates and uncertain job prospects has hit the demand for real estate. In the third quarter of 2013-14, sales volumes declined 43 per cent to 11.8 million sq ft from 21.9 million sq. ft in the same period last year, says a study by Knight Frank. Despite this, study says, the annual rise in prices of residential units in the last eight quarters is around 10 per cent.
Net profit of realty firms fell 41% in last 8 quarters: Report
Mar 28, 2014
MUMBAI: Net profit of top 25 real estate companies registered a fall of 41 per cent in the quarter ended December 2013, compared to the peak period of quarter ended March 2012. Net profit margins during this period plummeted from 13.6 per cent to 9.7 per cent, said a report by global realty consultancy Knight Frank.
Sensex turns negative in noon trade; HDFC, L&T drag
Mar 28, 2014
MUMBAI: Indian equities pared all its early gains and turned negativein thenoon trade on Friday. Realty and metal stocks witnessed a rise whereas capital goods stocks registered a fall.
IT czars pip real estate barons in list of richest candidates
Mar 28, 2014
BANGALORE: For the first time in many years, it is not politicians with interests in real estate or the mining industry who are topping the wealth charts in the list of candidates who have filed their nominations for the 2014 Lok Sabha polls from Karnataka.
Reaping a rich harvest
Mar 28, 2014
CHENNAI: Farmland is not an automatic association with real-estate investment though it can offer rich pickings.
A House for Mr NRI
Mar 28, 2014
HYDERANAD: NRIs who purchased property in India a few years ago have not managed to rake in the moolah. Unattractive returns in cities such as Hyderabad and Coimbatore have put off NRIs, particularly from the US, according to builders.
Godrej Properties adds new residential project in Chennai
Mar 28, 2014
MUMBAI: Mumbai based real estate developer Godrej Properties has entered into a partnership SSPDL Green Acres LLP to develop a residential project at Old Mahabalipuram Road (OMR), Chennai.
Report: Sales volume of listed real estate cos plunges 43%
Mar 28, 2014
PUNE: A research report by property consultants Knight Frank India has found that the volumes of 25 listed real estate companies over the past eight quarters has dropped from 21.85 million sq ft to 11.8 m sq ft, representing a decline of almost 43 per cent.
Election cash call puts strain on construction, real estate
Mar 28, 2014
DELHI: As India's mammoth general election approaches, jackhammer drills are quietening down at construction sites and earthmovers and cranes remain parked.

Latest Realty News Of State

Realty Talk's