In Today's Realty, What You Seek Is Seeking You

Are we not aware what a task would it be to find a perfect abode for ourselves? We would start the process only after we have saved enough money to make the purchase. Basically, it would be a long time before a decision in this regard is made and it would be much longer before it is implemented. In today's reality, that hardly remains true. Amid all the other changes that India's real estate sector has seen in the past five years or so is an interesting development that has significantly altered a homebuyer's position in the market.

What buyers seek is actually seeking them. Let us begin with money.

Looking for cheaper loans? Banks are going for the kindest cuts

Banks in India are facing immense pressure. Official data show total outstanding on mortgages in the banking system stood at Rs 9.08 lakh crore as of September 29. So, mounting is the pressure that Finance Minister Arun Jaitley is actively considering a recapitalisation of state-run banks to push growth.

“Some recent data raises certain concerns... and a lot of it has to do with the capacity of the banks, particularly PSBs, and, therefore, we are in the process of discussion and very shortly whatever is required to be done in order to improve the environment in terms of policy, we'll certainly react to it,” said the FM.

This has not stopped banks from going out of their way to attract home loan borrowers. In early November, public-lender State Bank of India announced its plans to offer the cheapest home loans in the industry. State Bank of India (SBI) effected a five basis point reduction in its Marginal Cost of Fund Based Lending Rate (MCLR) rates to bring it down to 8.30 per cent. Bank of Baroda is also offering its best-rated customers loans at the same rate.

Private players are not behind either. Earlier, financial institutions including Axis bank, ICICI Bank, IndiaBulls and HDFC bought down home loan interest rates to 8.35 per cent.

What about the housing stock? There is a plate full of them

Data available with PropTiger.com show inventory overhang at the end of the September quarter of the current financial year increased to 42 months due to a drop in home sales during that period. This means it would have taken about three years to sell the housing stock in Q2 of FY17 in the top nine cities in the country. In Q2 FY18, it would take three-and-a-half years to sell of the existing stock.

The nine key markets analysed in the report include Ahmedabad, Bengaluru, Chennai, Gurgaon (including Bhiwadi, Dharuhera and Sohna), Hyderabad, Kolkata, Mumbai (including Navi Mumbai and Thane), Noida (including Greater Noida and Yamuna Expressway) and Pune.

What makes it seem much better? Rates of property in several of these cities have largely remained stable in the past five years. On an average, property prices in the nine cities increased only two per cent in the second quarter on an annual basis, show data available with PropTiger.com.