A recently conducted consumer poll by Magicbricks revealed that nearly 38% consumers are looking to avail a home loan ranging between Rs 30 lakh – Rs 1 crore indicating the demand revival towards mid and high range homes.
This demand pattern is emerging for multiple reasons like need for an extra room due to Work from Home (WFH), reduction in circle rates, stamp duty, and low interest rates.
As per the poll with a sample size of 1,100 respondents, about 20% prospective home buyers are planning to borrow a home loan between Rs 50 lakh and Rs 1 crore and above category.
“Thanks to the recent initiatives by the central and the state governments, we are witnessing a rise in demand for home loans for mid-segment and high range properties. The market sentiment seems to be well aligned to the demand and reflects the same as consumer search data on Magicbricks Home Loans suggests that the average loan amount searched on the platform is Rs 34 lakh,” said Sudhir Pai, CEO, Magicbricks.
This, according to him, augurs well for the industry and indicates that transactions are picking up gradually across all segments of residential real estate.
Consumer behavior on Magicbricks Home Loans also suggests that most of the demand is being generated from the key residential markets of Bengaluru, Hyderabad, Delhi, Mumbai, and Pune. Besides Home Loans, Loan against Property (LAP) and Balance Transfer seems to be gaining currency in terms of consumer preference.
The average LAP amount searched in Hyderabad is Rs 35 lakh, Rs 45 lakh in Delhi-NCR, Rs 50 lakh in Mumbai and Kolkata and Rs 70 lakh in Bengaluru. Similarly, the average balance transfer amount searched in Bangalore is Rs 60 lakh, Rs 35 lakh in Delhi-NCR, Rs 32 lakh in Pune, Rs 40 lakh in Hyderabad, and Rs 80 lakh in Mumbai.
Several public and private banks and other financial institutions have reduced their home loan interest rates, which in turn offers further impetus to rising consumer appetite in the home buying space.
With the Reserve Bank of India keeping the repo rate unchanged at a constant 4% in its recent policy review meeting, many banks are also offering interest rates less than 7% for home loans to further catalyse the rising demand for home buying.
(Magicbricks is a part of Bennett, Coleman & Co, which publishes The Economic Times.)