Luring customers with festival discounts and freebies isn’t confined to customers’ durables and clothes today. Residential developers have started offering them as perks and such attractions are necessary in the buyers’ market. Rising property prices and high interest rates in Cochin, coupled with a demand supply mismatch have bought down the affordability of Flats in Tripunithura . Only prudent offers at lean times like this will arrest fall in sales, many builders seem to think. The economic slow down which has affected suburban and non-metro locations has led to some developers coming up with innovative schemes like ‘Book now and pay later, on possession’ as well as home loan installment payment for the initial two years.
For the property sector which has been facing the prospects of slow down as a result of higher interest rates and falling demand, the repo rate cut by the Reserve Bank of India has come as big relief. As you are aware there has been a lull in demand mainly on account of fears of a price correction of fears of a price correction which primarily got triggered by rising interest rates. The surging inflation rate had forced the central bank to tighten its monetary supply during the last couple of quarters. While it had the desired effect on inflation as there was a relief from upward movement, frequent raises of the cash reserve ratio sucked away the liquidity from the system, resulting in a tighter monetary situation. In fact the property investors were the worst affected as equated monthly installments (EMIs) shot up by a few thousands for many and tenures got elongated for those who preferred to keep their EMIs unchanged. In some cases banks did not even offer the choice of keeping the EMI intact to borrowers and forced them to pay up the differential amount the difference between new EMI and old EMI at one go. With rental yields too having fallen sharply it has been tough for property investors.
For the property sector which has been facing the prospects of slow down as a result of higher interest rates and falling demand, the repo rate cut by the Reserve Bank of India has come as big relief. As you are aware there has been a lull in demand mainly on account of fears of a price correction of fears of a price correction which primarily got triggered by rising interest rates. The surging inflation rate had forced the central bank to tighten its monetary supply during the last couple of quarters. While it had the desired effect on inflation as there was a relief from upward movement, frequent raises of the cash reserve ratio sucked away the liquidity from the system, resulting in a tighter monetary situation. In fact the property investors were the worst affected as equated monthly installments (EMIs) shot up by a few thousands for many and tenures got elongated for those who preferred to keep their EMIs unchanged. In some cases banks did not even offer the choice of keeping the EMI intact to borrowers and forced them to pay up the differential amount the difference between new EMI and old EMI at one go. With rental yields too having fallen sharply it has been tough for property investors.