Here’s why 2016 is good for buying homes

Your dream of owning a new home might get true soon. As per a recent report by Global rating agency Fitch upturn in the country's investment climate and reduction in interest rates will improve the property markby the end of March 2016 and provide relief to the debt-ridden developers.


In a news report by The Economic Times, the Reserve Bank’s reduction in the key policy rate by 0.50 per cent since January has prompted commercial banks to cut interest rates for home loan and other borrowers.

"We expect property developers with a greater exposure to the middle and lower income segments to benefit more from lower domestic interest rates," it said, adding that developers with a greater mix of high-income customers, such as Lodha Developers and Indiabulls, will be less impacted because their customers are less sensitive to market interest rates.


Both the companies, it said, would meaningfully reduce the portion of debts by end-2016.

Weak sales in 2014 and slower cash collections on properties had stalled the process of reducing leverage.
The PTI report has confirmed that Fitch has raised its forecasts for India's GDP growth to 8 per cent for the current fiscal, up from 7.4 in per cent in 2014-15, and 8.3 per cent for 2016-17.

Domestic property purchases remained weak in 2014 due to high interest rates and some political and policy uncertainty in an election year, it said, adding that several buyers postponed their purchases, which drove up inventory levels steadily during the last 12 months, read a news report by The Economic Times.

(Image: India Times)