Expensive home loans prompt builders to offer freebies and flexible terms


The fourth 50bps hike in the RBI’s repo rate took the total rate hike over the last five months to 190bps, which caused home loan rates to rise to as high as 8.5 %. This is affecting buyer sentiment in Ahmedabad.

The worst affected are buyers in the affordable housing category, followed by the luxury segment in the ticket size of Rs 50 lakh to Rs 1.5 crore. Given the situation, many builders in the city are offering lucrative deals like flexible payments or freebies to entice them during the holiday season.

Vihaan Group is one of them, offering flexible payment terms to buyers. “We are in the process of launching a luxury residential program in Gandhinagar. With interest rates steadily rising, we plan to give freebies as white goods to buyers. We are also offering flexible payment terms to buyers, such as giving them an additional six months for down payments depending on their circumstances so that they do not delay the purchase,” said Group Managing Director Himanshu Patel.

The Shivalik Group also offers flexible payment benefits in its residential schemes in Shela and Bhat as well as others in Ahmedabad. Group MD, Chitrak Shah said, “We have a few offers for buyers like the 10:75:15 offer. Here, the buyer pays 10% in the first three months, 75% as a bank quote (mortgage) and 15% when using the building (possession). We also have another offer of buyers paying Rs 5 lakh every month and staying at the time of BU.

Real estate experts have said that the real estate sector may struggle in the current quarter due to the steady rise in repo rates, as this may slow down residential sales.

City Estate Management’s Pravin Bavadiya told Mirror: “After the pandemic, repo rates were at rock bottom and people had been buying houses because EMIs were really low and they also got some good deals. But with the constant increase in mortgage rates, buyers are holding back. Therefore, many developers are offering flexible payment offers and giveaways to keep buyer sentiment high during this festive time. »

Saanvi Nirman Group developer, Ankur Desai, said: “Like us, developers provide flexible payment terms, especially in projects that are 30% complete. Such projects will be ready for ownership in about a year. Therefore, in such projects, we offer longer payment terms of 90 or 120 days depending on buyers.

For other programs such as the 30:70 payment terms, Desai said they take a 10% payment at the time of booking and the remaining 20% ​​is adjusted in their loan; while the remaining 70% is through a loan which will commence after the time of possession.

However, some developers think they will wait and see if there is a need for freebies or flexible payment terms.

Shilp Group Founder Yash Brahmbhatt said: “With high mortgage rates, we have stopped increasing house prices from now on. And while we don’t offer freebies or relaxed payment terms, we can do so if needed in the future.

We also offer flexible payment terms to buyers, such as giving them an additional six months for down payments based on their circumstances so they don’t delay the purchase.
–Himanshu Patel, Managing Director of Vihaan Group


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