Real estate developers have started to undertake mitigating measures to soften the impact of the rising interest rate regime on prospective homebuyers’ affordability levels and to support the continuation of robust sales momentum.
Record low interest rates in the last two years have helped housing sales reach pre-pandemic levels and in some key markets, touch historic levels. However, the reversal in the interest rate cycle is emerging as a key cause of concern for housing sales.
Realty developers including Tata Housing, Lodha Developers, and Runwal Group are stepping in to protect homebuyers and sales from the rising interest rate regime by capping the financial burden of interest on their home loans. Property brokers say that a number of other builders are also planning to give buyers this kind of choice.
Tata Housing has offered to cap the housing loan interest rate at 3.5% for a year for homebuyers at 9 of its projects across 7 cities in the country, including Mumbai, Delhi-NCR, Bangalore, Chennai, Kasauli, Goa, and Kochi. The buyer will have to pay only a 3.5% interest rate on the loan, while the company will take care of the balance payment. This offer will be available until September 15.
“Post the marginal rise in the repo rate, the home loan rates are on the rise, which has impacted the home buying sentiment. The past two years have been a great example of the positive impact of lower interest rates, resulting in a historic residential real estate sale,” said Sanjay Dutt, MD & CEO, Tata Realty and Infras