Indian market gets a boost from cut in lending rates

Cutting percentage points

 

 

 

 

The Reserve Bank of India (RBI) cut the key policy rate by 25 basis points at its January 29 review of monetary policy, resulting in many banks announcing cuts in their lending rates and fueling speculation of increased demand. India’s National Housing Bank (NHB) reduced its prime lending rate by 25 bps to 9.75% the same day. It is expected that there will be a rise in demand for housing, particularly in small cities where prices are still affordable.

As of end 2012, Indian banks have a 67% share of the housing finance market, estimated at Rs.7trillion (roughly €98 million/US$129 million). The NHB has estimated the housing finance industry could see around 20% growth in 2012-13 from the previous year.

The Indian market outlook has become more positive in response to the cut in interest rates and there is an expectation among industry specialists that the forthcoming budget will include items to further boost the industry.  There is further belief that the bank's action could potentially pave the way for an increase in foreign investment in the sector as well.

WorldProperties.com agents in India are represented by the National Association of Realtors – India. NAR-India was established in 2008 as a single, national level umbrella organization representing the interests of thousands of real estate professionals affiliated with more than 25 metropolitan associations across India.

ICREA

he Reserve Bank of India (RBI) cut the key policy rate by 25 basis points at its January 29 review of monetary policy, resulting in many banks announcing cuts in their lending rates and fueling speculation of increased demand. India’s National Housing Bank (NHB) reduced its prime lending rate by 25 bps to 9.75% the same day. It is expected that there will be a rise in demand for housing, particularly in small cities where prices are still affordable.

As of end 2012, Indian banks have a 67% share of the housing finance market, estimated at Rs.7trillion (roughly €98 million/US$129 million). The NHB has estimated the housing finance industry could see around 20% growth in 2012-13 from the previous year.

The Indian market outlook has become more positive in response to the cut in interest rates and there is an expectation among industry specialists that the forthcoming budget will include items to further boost the industry.  There is further belief that the bank's action could potentially pave the way for an increase in foreign investment in the sector as well.

WorldProperties.com agents in India are represented by the National Association of Realtors – India. NAR-India was established in 2008 as a single, national level umbrella organization representing the interests of thousands of real estate professionals affiliated with more than 25 metropolitan associations across India.

ICREA

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