Demonetisation impact: Housing finance cos likely to cut rates

Moneycontrol BureauWith reduction in the cost of funds due to cash crunch in the economy, mortgage companies are looking to cut rates in order to push up the sluggish growth in the housing sector. A report in Economic Times mentions that companies like HDFC and Indiabulls Housing plan to cut rates by 25-50 basis points (bps) to help improve the demand. This will be a certain positive for home seekers looking to buy a house. With lower cost of funds, these companies are in a position to pass on the benefits to its customers. Post demonetisation, real estate demand saw a slump with a cut in the black money flows. Traditionally, real estate has been one of the beneficiaries of unaccounted income.The housing companies have raised funds in the bond market. In November, HDFC raised about Rs 2,000 crore while Indiabulls raised Rs 500 crore at cheaper rates.