Housing sector awaits 6 percent interest rates

In a bid to boost housing sector, the Central government is contemplating a new housing scheme to use funds from the demonetization drive to revive the slumping realty sector. In this connection, the government is already negotiating with the Reserve Bank of India (RBI) for the scheme. The new housing scheme might be announced in the Union Budget 2017, slated to be presented on February 1. The final contours of the housing scheme will be decided after the details of revenue earned from demonetization emerge. The interest rate stands between 6 and 7 percent for home loans upto Rs. 50 lakh. The new lower interest rate option will be available to first-time borrowers. As a matter of fact, the lower interest rates will be a boon for the real estate sector, as explained by an expert, adding that scheme like the Pradhan Mantri Awaas Yojana will come up where there will be interest of subvention and the marginal cost of lending rate is higher and the difference will be met by the government. The upcoming scheme will not just benefit low-end income families but will also inject a big boost to the country’s real estate sector.