Real Estate counters back on bulls` list

Real Estate stocks had been on the receiving end in recent times following increase in interest rates by RBI over last two months. On March 30, RBI had unexpectedly increased its overnight lending rate by a quarter percentage point to a 4 1/2 year high of 7.75% to tame rising Inflation rates.

The RBI decided to keep key lending rates unchanged to support slowing economic growth, taking in consideration that five increases in the past year were enough to tame inflation. This decision brought the Real Estate stocks back in action.

Further, India’s central bank announced that it had asked the banks to charge less from individuals for home loans, as cost to buy a house has risen after five interest-rate hikes in the past year. It declared that they would reduce risk-weighting on individual loans to 50% from current 75%. So by taking such measures rising loans rates could be controlled making it more affordable for the buyers, especially first time buyers to purchase property.

Source://indiainfoline.com