The largest lender of the country, State Bank of India has noticed a dip in the home loan demand in this financial year on a y-o-y basis, informed a senior official of the bank.
The bank had posted a 32% growth in demand for home loans on y-o-y basis last year.
"Our home loan advances growth will be a shade lower than last year. The drop is because demand for home loans has come down. Inflation has impacted the demand. High real estate prices and rising interest rates are also responsible for bringing down the demand of home loans," said the SBI official.
According to Nitin Kumar, deputy vice president, Quant Broking, concurs. "Now SBI home loans are linked to the base rate. That is perhaps the reason growth is dipping."
The bank had been offering teaser loans till December 31, 2010. From January 01, 2011 the interest on teaser loans got linked with base rate and thus rose. Also SBI hiked its base rate twice since then.