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Will Home Dreams Sour?

  • Housing loan rates have gone up by about two percentage points in the past 15 months
  • The reason is a tightening of the credit market, prompted by the central bank
  • The doubling of the credit growth in the past two years has left the rbi worried about repayment and bank exposure
  • Reverse repo rates stand at 5.5% , bank rate stays at 6%. Housing loan rates are 2 percentage points higher than in Oct 2004.
  • There is also the sustained battle to keep the rupee pretty steady against dollar
  • So, brace yourself for more hikes this year
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