FOUR SUCCESSIVE REPO rate hikes by the Reserve Bank of India have pushed up interest rates on home loans to the pre-pandemic levels of June 2019. Now, with interest rates at a three-year high of 8.1% to 9% across categories, housing loans may be staring at a slowdown after witnessing a 16.4% rise in outstanding during the 12-month period ended August 2022. This has come on top of a 11.6% growth in the year-ago period.
According to the RBI data, housing loan outstanding jumped by ₹2.51 trillion to ₹17.85 trillion in the 12month period ended August 2022 against a rise of ₹1.85 trillion to ₹15.34 trillion a year ago.
While the RBI has already hiked the repo rate by 190 basis points from 4% in May 2020, when the Covid pandemic roiled the country, to 5.90%, experts point to indications that more hikes are in the offing, which would further hit the setcor. "Further aggressive rate hikes from hereon may dent economic revival and dampen customer sentiment (in the housing segment)," said Ravi Subramanian, MD & CEO, Shriram Housing Finance.
HDFC had hiked the retail prime lending rate by 50% soon after the RBI decision last week, taking home loan rates upwards to 8.10% to 9% across categories.
This story is from the October 04, 2022 edition of Financial Express Mumbai.
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This story is from the October 04, 2022 edition of Financial Express Mumbai.
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