India Properties and Home Loan Connection

Role of Home loan and other financial facilities in the growth of Indian Real estate sector

Real estate sector in India is the dark horse of the booming Indian economy. And this boom owes its privilege to the tax incentives given to the housing finance sector in the annual budget of 2001. Transactions related to buying and selling of residential properties increased considerably and was much higher as compared to previous years. However, commercial property investments remained passive due to weakening economy, unrealistic property taxes resulting in high vacancy and falling prices. It was time when India Properties needed to climb new heights and become a vital sector to kick-start a stagnating economy. At such a point buyers required loans to buy the property of their choice.

The buyer of a real estate property could be of different types - corporate, individual, trust or a group of individuals. But the common requirements of all these buyers are funds. The need for loans is taken care of by specialized housing finance companies, foreign banks and nationalized banks spread across the country that are set to play the most important role in the development of the real estate industry and are the end users. The government is required to address the needs and expectation of these players whose mortgage-backed securities would enable Housing Finance Companies in India to raise funds at cheaper costs from capital markets and provide another investment tool for investors. Housing finance companies are allowed to raise funds from the market in the form of fixed deposits and bonds with tenure of not more than 7 years.

Housing Loans Available With Ease

In the current economy of India, the real estate sector has the maximum propensity to generate income and demand for materials, equipment and services. There is a need for creating conducive environment for property transaction. The current crisis faced by the people involved with the real estate sector, be it the realtors, investors or the housing finance companies is the shortage of funds and non-existence of efficient legal frame work. It can be said that housing finance companies were formed to cater to the co-existing buyer’s requirements of home loans for investing in properties. Home loans in India are made available by financial institutions to both Indian and NRI customers at floating and fixed rate of interest and also at attractive EMI options.

• for construction or buying a new home


• for home repairs and renovations


• for purchase of plots


• against mortgage of property

These customized facilities of availing home loans for properties has lead to the growth of the Indian realty sector and with support from the government in terms of sector friendly laws, this sector certainly has the ability to contribute to GDP growth substantially contributing to boom in India’s global economy.