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Banks raise lending rates: Here’s what realty experts have to say

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Close on the heels of the Reserve Bank of Indias (RBI) recent hike in repo rate by 40 basis points, besides giving indications it would raise further in the upcoming monetary policy review meets, several Indian lenders too have raised their lending rates.

On Wednesday, lending major HDFC and PNB Bank raised their lending rates by 5 basis points and 15 basis points, respectively.

The upward revision in rates will essentially lead to an increase in EMIs for borrowers.

Recently, the State Bank of India (SBI) and Bank of Baroda also hiked their lending rates across various tenures, as per reports.

At the same time, the government also waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry. Steel is a key input for the real estate industry.

Here’s what some of the developers and domain experts have to say on the impact of rate hike on the realty sector and its demand:

Vivek Rathi, Director, Research at Knight Frank India

An increase in home loan interest rate by 1 per cent reduces house purchase affordability by 7.4 per cent. We are on a landscape of rising interest rates and increasing property prices, which will put pressure on affordability if they move beyond income growth.

At the current juncture, strong income growth is supportive of homebuyer affordability. Hence, a comfortable affordability level coupled with the renewed enthusiasm for home ownership shall help maintain the strong housing sales momentum in the near term.

Dharmesh Shah, CEO of Hero Realty

The retail buyers in the home segment have seen an incredible increase post-pandemic. Despite an increased interest rate the market is expected to be buoyant but this increase has come at the wrong time.

The home buyer segment needs a pat on the back and not an increase in the interest rates. However, this also considerably marks a sense of stability as the end of low-interest rates will bring the serious buyers back in focus.

Sanjay Sharma, Director, SKA GROUP

At a time when the real estate sector had just begun to pick up, the increase in home loan interest rates, even though negligible, would act as a psychological barrier for the buyers. Coupled with the increase in input costs that to an extent had forced the developers to increase in prices, it would act as a dampener to the buyer’s spirit, especially the ones looking for homes in the affordable segment.

Nayan Raheja, Raheja Developers

The increase in interest rates by banks could not have come at a worse time. With buyers shaking off the negative spirits of the pandemic and seeking to benefit from the historic low costs of the dwelling units as well as historic low home loan interest rates, the move by the banks would definitely have an impact on buyers’ sentiments. Further, it will affect the real estate sector that had begun to pick up pace after a gap of two to three years and which among others is one of the largest generators of employment. Most of all it will also signal that the days of low home loan interest rates are over.

Sachin Gawri, CEO and Founder Rise Infraventures Limited

The news of interest rate hikes by the banks especially after RBI had raised the base rates were a foregone conclusion. However, I wish that the banks had waited for a few more months for this series of hikes. At least it could have waited for the real estate sector to pass on the benefits of the reduction in fuel prices and the decrease in the price of iron (through hike in export duty) to the customers. The move will also affect the development of the commercial and retail segments.

Deepak Kapoor, Director of Gulshan Homz

The current hike in home loan interest rates by banks will surely convey to home buyers that interest rates are only going to go northwards. Contrary to the popular perception that any such increase only affects the affordable housing segment, the move, according to me, will also leave a big impact in the big-ticket luxury segment that involves high volumes of money, hence higher EMIs and higher interest amount. Besides, since one of the banks had increased its RPLR three times in one month, the move will also add to the uncertainty regarding the quantum of hikes in the future.

Crime

Bengaluru: Nursing student raped by PG owner after confessing to theft; accused held

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Bengaluru, June 25: An incident has been reported from Bengaluru on Wednesday where a nursing student was allegedly raped by the owner of a paying guest (PG) accommodation after she confessed to a theft, officials said.

The police have arrested the accused.

The arrested person has been identified as 35-year-old Ravi Teja Reddy, the owner of the PG facility.

According to the police, Reddy raped the 21-year-old woman after she admitted to stealing three gold rings from another girl residing in the same PG.

Following the victim’s complaint, Reddy has been booked for rape and taken into police custody.

The victim, a nursing graduate from Andhra Pradesh, had joined the PG only a week prior to the incident and was searching for a job, the police said.

Investigations revealed that the victim had allegedly stolen three gold rings from another PG inmate.

She had also disconnected the CCTV camera wire during the theft.

However, she asked another inmate whether the CCTV footage would still be recorded despite the wire of the CCTV camera being cut.

This conversation was shared with Reddy, which raised his suspicion on the nurse.

Reddy then summoned the victim for questioning and threatened to hand her over to the police.

The girl reportedly confessed to the theft, after which Reddy instructed his aides to retrieve the hidden valuables, police added.

When the victim pleaded with Reddy to forgive her and not to inform the police, he allegedly slapped her and sexually assaulted her.

Initially hesitant to file a complaint, the victim later confided in a male friend.

The friend then contacted a city-based advocate, who helped lodge a formal complaint with the police.

Based on the complaint, the police sent the victim for a medical examination and arrested the accused.

Reddy has been booked under Sections 64(1), 74, and 75(1) of the Bharatiya Nyaya Sanhita (BNS) Act.

In her complaint, the victim said that Reddy initially touched her private parts under the pretext of checking her.

When she resisted, he allegedly forced her to perform oral sex.

The FIR further mentions that the victim, unable to control her urge to vomit after the assault, ran to the restroom.

Reddy followed her and allegedly forced her to have unnatural sex again.

The victim also said that Reddy later threatened her not to reveal the incident to anyone.

It was only after the victim’s friends came to her support that she gathered the courage to file a complaint.

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International

South Korea welcomes Israel-Iran ceasefire, commends US’ diplomatic efforts

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Seoul, June 25: The South Korean Foreign Ministry on Wednesday welcomed the announcement of a ceasefire between Israel and Iran and praised the diplomatic efforts led by the US and other involved countries.

“We hope that all parties will faithfully implement the terms of the agreement so that tensions in the region can be eased swiftly,” the ministry said in a statement.

As a non-permanent member of the UN Security Council, South Korea “will continue to participate in the international community’s efforts to promote peace and stability in the Middle East,” Yonhap news agency reported.

Earlier on Tuesday, US President Donald Trump declared that a ceasefire between Iran and Israel had officially taken effect, urging both sides to maintain restraint.

“THE CEASEFIRE IS NOW IN EFFECT. PLEASE DO NOT VIOLATE IT! DONALD J. TRUMP, PRESIDENT OF THE UNITED STATES!” Trump posted on the social media platform Truth Social.

The announcement came amid escalating violence in the Middle East, but President Trump’s declaration appeared to catch both parties off guard. The ceasefire claim was quickly contradicted by Iran, which asserted it had not received any formal proposal from Washington and had not agreed to a bilateral ceasefire.

US President Trump also wrote, “Israel & Iran came to me, almost simultaneously, and said, ‘Peace’! I knew the time was NOW. The World, and the Middle East, are the real winners!”

“Both Nations will see tremendous love, peace and prosperity in their futures. They have so much to gain, and yet, so much to lose if they stray from the road of righteousness and truth. The future for Israel & Iran is unlimited and filled with great promise. God bless you both!” he added.

Earlier, Iran announced a unilateral halt to its military operations against Israel, effective 4 a.m. local time, but made it clear that the pause was conditional, based entirely on whether Israel would stop its own airstrikes and military actions.

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Crime

PFI had ‘hit list’ of 950 in Kerala including judge, reveals NIA probe

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Kochi, June 25: In a startling revelation made by the National Investigating Agency (NIA), it has surfaced that the banned Popular Front of India (PFI) had prepared a hit list of 950 people in Kerala.

The list, which surfaced in the media on Wednesday, included a now-retired district judge.

Incidentally, this list was submitted early this month by the NIA at a special court here when the bail applications of four accused in the murder of RSS leader Sreenivasan came up for hearing. The NIA opposed the bail strongly. The four accused, identified as Muhammad Bilal, Riyasudheen, Ansar K.P. and Saheer K.V., were arrested for murdering Sreenivasan at Palakkad, Kerala, in 2022.

The list of 950 was compiled after getting confirmed inputs from different places by the NIA probe team. It includes eight documents seized from the 51st accused, Sirajudheen, which contain a list of 240 people from other communities.

Then, while conducting a search held at Periyar Valley Campus at Aluva, NIA was able to get the details of five targeted persons from the purse of the 15th accused, Abdul Wahad, who is presently on the run.

It was in this list that the name of a former district judge was found.

Another document seized from an accused, who turned approver later, contained a hit list with the names of 232 people.

Similarly, a search held at the home of the 69th accused, Ayoob, a hit list containing the names of about 500 people was found.

When the NIA was probing the Sreenivasan case, the PFI link emerged. It was later found that PFI had sinister plans to create unrest in the country.

During the investigation, the anti-terror agency got details of the PFI carrying out physical and arms training for its cadres.

The NIA has now claimed that it has voice clips and witness statements that reveal the ‘India 2047 plan’ of setting up Islamic rule in India.

The special court, after hearing both sides and going through the documents produced before it, observed that there were reasonable grounds for believing that the accusation against the petitioners was prima facie true, and rejected the bail petition.

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