Global rating agency said in the statement that likely upturn in the country’s speculation climate and decline in the interest rates will improve the property market by the end of the march 2016 and provide the relief to the debt ridden builders. Agency declared that the property development sector will be a key beneficiary of the decline in the housing loan interest rated by many domestic banks in the month of April 2015.
Apart from this, the Reserve Bank has reduced the attractive & encouraging policy rate by 0.50% since the January month and encouraging the commercial banks to cut the interest rates for home loan and other debtors. We observe sensibly and precisely well-known builders with a larger exposure to the lower and middle income segments to benefit more from lower domestic interest rates. Developers like Lodha and Indiabulls with higher income clients are not benefited because their clients are less sensitive to the market interest rates.
The rating agency observed that the procedure of reducing the leverage stalled in 2014 year due to weak sales and slower cash assortments on the lavish assets that were sold towards the end of 2014 year and in early 2015 year, as the developers announced the attractive and lucrative payment schemes to the stoke demand.
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