Mumbai, Sep 13 (UNI) Real estate prices have made greater impact on the housing loan demand, as compared to the interest rate hike in last five years, say experts.
In a panel discussion at the Federation of Indian Chambers of Commerce and Industry (FICCI) conclave today, ICICI Head of Home Loans&Mortgage Sunil Rohokale pointed out that the four per cent rise in interest rates (7.5-11.5 per cent) during 2004-2007 impacted the loan demand 20-25 per cent.
Whereas the same impact on the demand was seen when real estate prices saw phenomenal increase of more than 300 per cent during last five years, he observed.
The State Bank of India (SBI) director (National Banking Group) K Sitaramam said the home loan demand will go up as more than 42 per cent of the Indian population will live in urban cities in the near future and 220 to 350 new malls are coming up with in next five years.
Echoing Mr Rohokale's views, Mr Sitaramam said the demand for home loans had slowed down over the past few months due to rising property prices. The number of applications for home loans and registrations of new flats had come down.
Mr Rohokale said the interest rates had increased by 250-350 basis points in the last 18 months. Also, the property prices had increased by as much as 40-50 per cent in the same period.