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How are home loans influencing India’s residential real estate market?

Home loans play a pivotal role in driving housing demand in India by increasing affordability and enabling wider property ownership among middle-income segments.

  • Interest Rate Sensitivity: The RBI influences home loan rates, impacting buyers' affordability.
  • Loan-to-Value (LTV) Ratios: Banks offer LTV ratios of up to 80-90%, minimizing initial down payments.
  • PMAY & CLSS: Government-backed loans under Pradhan Mantri Awas Yojana provide interest subsidies.
  • Tax Benefits: Deductions on principal (Section 80C) and interest (Section 24) make loans more attractive.
  • Competition Among Lenders: Banks and HFCs offer flexible EMI plans and balance transfers.

Overall, easy credit availability and government subsidies have spurred residential sales across income brackets.

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