RBI’s new credit policy to affect affordable housing

In the affordable housing segment some hope has been given to the investors by Reserve Bank of India in its annual Credit policy. For overall property market this move by RBI is seen as a positive development. The realtors are very optimistic of the current scenario and are hoping that inflation will remain under check. On the other hand investors are cautious and are waiting for banks to announce decrease in interest rates. The rate cut of fifty basis points is ray of hope. The reserve bank of India has hiked the interest rates about thirteen times between March 2010 and October 2011. The ongoing inflation concern and liquidity in the market, the hike in rates has created problems for residential real estate market. The prices that the builder put on their properties have been affected by the series of hikes in the past few years. However it is quite unlikely that prices of property will decrease because of this current rate cut. It is estimated that because of anticipated improvement in buyer’s sentiments, there will be upward bias in property rates. The buyers are waiting for signals of reliefs. Home loans are likely to turn cheaper and leading lenders are likely to cut their rates.