PSU banks cut rates on home loans up to Rs 20 lakh

Major real estate players today gave a thumbs down to the announcement by public sector banks to cap interest rates at different slabs of housing loan, saying it was not enough, though they felt the step could spur demand in smaller towns.

"Rate of interests are still very high... There will not be many takers," said DLF Group Executive Director Rajeev Talwar, adding that the rate of interest should have been around 7-8%.

"This package will give a miss to super metros, metros and Tier-I cities, which are the major segments for demand drivers," they said.

Public sector banks today announced that home loans up to Rs 5 lakh would be given at a maximum interest rate of 8.5%, while those between Rs 5 lakh and Rs 20 lakh would be offered at 9.25%.

 

Parasvnath Developers Chairman Pradeep Jain said: "The disappointing part is the rate of interest. We were expecting a much higher cut in the rate of interest."

However, he said low margin money and charging of no processing fee were welcome steps. "For loans over Rs 5 lakh, we were expecting 6% and between Rs 5 lakh and Rs 20 lakh we were expecting 7.5%," he said, adding, "overall it will give a partial push to the real estate sector, particularly in the affordable housing segment."

Airing similar views, Omaxe CMD Rohtas Goel said: "We were expecting more sops from banks for the housing sector... for loans up to 50 lakh, interest rates should have been 9% and and for Rs 5 lakh, 5%."

Unitech Managing Director Sanjay Chandra, however, hailed the package as an "excellent thing" that would boost the realty sector.