Home loans likely to cheaper in 2013 giving push to realty

With the RBI signalling a shift in focus — from inflation to growth — interest rates are likely to start coming off from January. RBI stood pat on the key rates and ratios at its mid-quarter monetary policy review in December, belying expectations of some reduction. 

The indications of the inflation rate cooling down towards the end of the year and the moderating growth rate, however , resulted in the central bank infusing more liquidity into the banking system with a cut in the cash reserve ratio.

While this move cheered the markets and home loan interest rates witnessed the beginning of a downward trend, the more heartening news of deeper cuts in the rates can be expected in the course of 2013.

Banks are currently offering home loans on a par or just 25-50 bps higher than their base rates, which is around 10% for large lenders at present. A reduction in the key policy rate would compel them to reduce base rates.