Bhoomika Singh
The real estate players must be heaving a sigh of relief at the Reserve Bank of India’s (RBI) Monetary Policy Committee’s (MPC) decision to hold the repo rate at 6.5 per cent.
In a unanimous decision, the MPC on Thursday decided not to revise upwards or downwards the repo rate, the rate at which the RBI lends to the banks.
“The RBI’s decision to hold rates is welcome as this will enhance buyers’ confidence especially after repeated hikes had already increased their acquisition cost,” said Ramani Sastri, Chairman & MD of Sterling Developers.
Home loan interest rates are already at an alarmingly higher level of 9.5 per cent and above due to the increase in repo rates in the recent past. A further hike would have taken the housing loan interest rates to double digits.
Several industry officials had voiced their views on the impact of another rate hike on home loan interest rates.
The President of NAREDCO Maharashtra, Sandeep Runwal says,
“The RBI’s decision to keep the repo rate unchanged at 6.50 per cent is a welcome move signalling that interest rate hikes could be over. Also, time to balance growth and inflation. This will certainly positively impact the rate-sensitive segments of affordable and low-income group housing. Keeping the repo rate unchanged will help in offsetting the rising property rates and will reduce home buyers’ burden to a large extent.
The real estate industry is linked with several other allied industries and therefore it impacts the entire economy. We urge the government to offer relaxations in stamp duty fees that it offered at the time of the pandemic to further encourage homebuyers’ interest in property buying.”
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Weighing in, Pritam Chivukula, Co-Founder & Director, of Tridhaatu Realty and Treasurer, CREDAI MCHI told, “This is a big booster for the real estate sector which was overlooked in the recently concluded budget. We can look forward to seeing a resurgence in real estate demand. We hope that the State Government will step in again to lighten the homebuyer’s load by reducing stamp duty to further boost the sentiments.”
Some expectations are held by Himanshu Jain, VP of Sales, Marketing and CRM, Satellite Developers Pvt. Ltd. (SDPL), as he says, “We expect demand for housing to rise, more stability to property prices coupled with market sentiments improving. Also, for first-time home buyers, acquiring a home is considered as the biggest asset and this move will have a positive impact on a buyer’s decision.”
While Bhushan Nemlekar, the Director at Sumit Woods, calls it a good decision, as he believes that “This will positively impact the entire real estate spectrum and value chain. Demand for housing will go up and the momentum that we were seeing in the last couple of quarters will continue.”
