Chandigarh: Rising lending rates has cast its shadow on the otherwise booming real estate market of Punjab, Haryana and Chandigarh, with prices of residential property falling by up to 15% in the last couple of months.
With potential home buyers postponing their decision of entering the real estate market in the wake of high lending costs, it is the private financers who are suffering a lot as their large investments are getting blocked in the absence of buyers.
“The buying of residential property activity in Chandigarh and areas like Zirakpur in Punjab has taken a hit due to lending rates..the rates of property has come down in the range of 10 to 15 %,” housing finance company HDFC, joint general manager (Punjab, Haryana and Himachal Pradesh), PC Srivastva said here.
He insisted that rates were expected to further drop by another by 5% in next few months in light of the reduced participation of buyers.
Lending rates for home loans have gone up by over 2% in the last one year because of tight monetary policy followed by apex bank RBI.
“The buying activity has been affected adversely in Chandigarh due to rising interest rate of home loan which has put a huge burden on buyers,” Chandigarh Property Consultants Association, Kamaljit Singh Panchhi said.
Real estate consultants pointed out that the impact of interest rates could also be gauged from the fact that transactions of high value properties in Chandigarh have almost come to a halt.
The correction in real estate market in Punjab has also been guided by sudden appreciable increase in rates in the last seven months or so. “Property rates were ruling high by 30 to 40%, which also necessitated certain amount of correction in prices,” Janta Land Promoters, MD, Kulwant Singh said.
In Haryana, property experts attributed the sluggishness in the demand for property to unprecedented hike in collector rates.
“In Panchkula alone, the collector rates have been raised by 50% for residential property and over 200% for industrial estates,” Haryana Property Dealers Association, President, Suresh Aggarwal said.
“It has a dampening effect on the property market in Haryana,” he said.
To allure buyers, a few of the leading property developers in Punjab have rolled out new schemes for home buyers by offering to bear interest burden on housing loan till the possession is given to them.