Housing Development Finance Corporation (HDFC) on Friday reduced its retail prime lending rate on housing and non-housing loans by 20 basis points.The prime lending rate is the rate on which commercial banks lend to their customers. The private sector lender’s adjustable-rate home loans are benchmarked against the retail prime lending rate.
“The change will benefit all existing HDFC retail home loan and non-home loan customers,” HDFC said in a statement.Recently, State Bank of India (SBI) cut its marginal cost of funds based lending rate by 25 basis points across all tenors.
Industry experts say property sales have slowed, resulting in a high stock of unsold inventory. Tight funding conditions are straining developers’ ability to complete projects and by extension their solvency.The drop can largely be attributed to COVID-19 pandemic which impacted investor sentiments as well as a slowdown in the Indian economy since last year.
With pay cuts and job losses becoming pervasive, the residential and retail real estate segments will have to chart an arduous journey towards recovery, according to Knight Frank India.