Top banks and builders in India are showering discounts and offering low interest rates to home buyers this festive season to ramp up demand in the realty segment, says Bloomberg in a report.

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Last year, residential sales were down even during the festive season due to the COVID-19 pandemic.

Propped by the cash injection by the Reserve Bank of India (RBI), banks like the State Bank of India (SBI), Kotak Mahindra Bank Ltd, Punjab National Bank and Housing Development Finance Corp have cut home loan rates by 15-60 basis points to 6.5 percent and 6.7 percent. These are the lowest rates in a decade, says the report.

The SBI has slashed home loan rates to 6.7 percent for all segments of borrowers. Kotak Mahindra Bank is offering home loan interest rates between 6.65-6.50 percent from September 10 to November 8. Bank of Baroda (BoB) has slashed rates by 0.25 percent to 6.75 percent for home loans and 7 percent for car loans. Apart from this, the bank will also waive the processing fees for home loans. PNB is offering 6.55 percent home loan rate, while HDFC will give its customers home loans at 6.7 percent interest rate.

Lenders are hoping to attract a safe set of borrowers at a time when their asset quality has come under threat following the pandemic.

“The reduced home loan rate announcements are appropriately timed and will give the right fillip to residential sales," Samantak Das, Chief Economist and Head of Research at property research firm Jones Lang LaSalle Inc, told Bloomberg.

According to Das, home sales could go up 30-35 percent in the second half of the year against the first half on the back of these offers.

“It is an encouraging move by leading banks to slash interest rates, especially during the onset of the festive season. Even now, a low-interest rate by reputable banks is bound to catapult unimaginable economic growth in the country as a result of enhanced consumption. The initiative will surely make homeownership affordable and viable for fence-sitters who can now plunge on the best opportunity to buy their dream home,” Vedanshu Kedia, Director of Prescon Group, told Deccan Herald.

Real estate companies are also offering discounts, gifts, stamp duty waivers, deferred payment plans and foregoing charges to boost sales. They are also running promotions on print, digital and electronic media.

Realty consultants have also come up with innovative festive offers to lure prospective home buyers.

Housing.com will be organising a Mega Home Utsav 2021 between October 1 and 31, where over 150 builders are expected to showcase their properties in 12 cities across India.

“Historically, this period has given us a good build-up for ending the year on a good note,” Mohit Malhotra, Managing Director and CEO at Godrej Properties, told Business Standard.

Also read: Home loan balance transfer: Key points to consider before switching to new lender

(Edited by : Shoma Bhattacharjee)