Demonetisation, implementation of the goods and services tax and RERA have taken the sheen off the demand for home loans, which typically sees a spike before the festive season, bankers said. However, demand for other retail loans such as two-wheeler loans and personal loans is strong, they added. “On home loans, there has been some impact of GST, demonetisation and RERA. As compared to last year, we are seeing a little less demand,” said PK Gupta, managing director, retail and digital banking, State Bank of India. “But I think it is more of a temporary phase. But once things start settling down, I don’t think there should be any issue. Home sales is likely to go up once people fully understands the implications of RERA.” Bankers said demand for home loans was subdued compared to the other years despite a slew of festive season offers introduced by various banks.
Recently, Kotak Mahindra Bank introduced home loans at 8.35%, a rate which is at a 6-year industry low, it said. In addition, 50% of the processing fee will be waived on loans till December 31, 2017, the bank said. In September, ICICI Bank had launched a home loan scheme that offers borrowers 1% cashback on every equated monthly installments for the entire tenure of the loan. Earlier that month, it had launched another cashback offer where the home loan customers would get a cashback of 20% (up to Rs 10,000) on minimum spend of Rs 30,000 on their ICICI Bank credit or debit cards.
Axis Bank had launched an affordable home loan product in August that allows borrowers applying for loans of up to Rs 30 lakh the benefit of 12 EMIs being waived. The waivers will come into effect in a staggered manner, with four EMIs each being waived off at the end of the fourth, the eight and the 12th year from the date of the first disbursement.
“Demand for home loans has been been steady, but there has been no spurt in demand for housing loans before Diwali. In the others years, we do see an increase during the festival season,” a senior official of a large private-sector housing finance company said on condition of anonymity since the company is in the silent period before its second quarter results.