Home sales across India take a big hit

Anil Singhal, a property consultant based in Delhi's Connaught Place, says he has enough free time these days.

Reason: business has dropped 60 per cent from eight to 10 home sales deals a month at the beginning of this year to just three to four.

"Though prices have been stagnant in most areas, not many people want to buy now, as they are buying on EMIs (equated monthly instalments) and home loan rates have gone up sharply. More important, the fear factor has come back and the situation is getting worse each passing day," he says.

The Reserve Bank of India has increased interest rates 11 times since March 2010 to curb high inflation, prompting home loan finance companies and banks to increase rates by 250-300 basis points (100 bps equals one per cent).

Singhal's concerns are shared by DLF, the country's largest developer.

"Increasing economic uncertainty, rising interest rates and EMIs and an overall gloomy situation are making home buyers hesitant," said Rajeev Talwar, group executive director.

Text: Business Standard

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