Home Loan Demand crunch?

Finally Psu banks are cutting rates marginally to attract home loans , while the loan machine ICICI bank is still staying put.I wonder why? is it

1. Home prices stuck in an inflationary bubble? Lack of demand ? Builder lobby ramping up and artificially trying to control prices?

2. Home purchases giving investors Negative Return / Rent received on the house is below Fixed deposit returns?

3. Mounting maintainance costs dissuading investors and end users alike?

4. Psu banks dont want to take the risk of giving home loans to people having a weaker financial background? Do they prefer a lower risk return beta and give out safer loans?

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3 thoughts on “Home Loan Demand crunch?

  1. the boom in the financial sector was due to increase in home loan and personal (unsecured) loan.. given primarily for land purchase….
    u mean to say the golden period of banks is over?

    No Ankur im just as curious im asking what u folks think

  2. As far as I know home loans are getting expensive, and this will be great for those who have their homes to give on rent.
    Overall, prices of real estate have gone up. Rents too.
    However as to questions you asked, I do not have the answers.

    Nita neither do i but i guess
    Time will tell, i think our property markets have overheated thanks to blind capital investment by nris in land and house purchase/whitewashing of money thanks to new pan regime and fiis in firms like parswanath and many others on basis of land bank valuations and the nexus between politicians, builders and slumlords(in mumbai) who want to control flow and supply of reality.
    These are bubble periods and sometime in future, and depending upon variables and us economy both stock n property market might just plunge or atleast correct.

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