GURGAON: The Reserve Bank of India’s decision to keep the
repo rate
unchanged at 6.5 per cent for the eighth consecutive time is likely to raise sentiments in the residential real estate market.
This stability may ensure that
home loan interest rates
remain low, making housing more affordable for potential buyers. Also, with unchanged borrowing costs, both developers and homebuyers are likely to benefit from increased market confidence and predictability.
Real estate market leaders say the mid-range and premium property segments together account for more than 55 per cent of the current supply.
Together, they recorded approximately 76,555 units sold in Q1 2024, nearly 60 per cent of the total sales.
“The buyers of this segment are sensitive to volatile interest rates, and upward hikes would cause many of them to defer home purchases. This policy continuity supports sustained demand in these two segments. The affordable housing sector is, of course, most cost-sensitive,” said an Anarock spokesperson.
Anshuman Magazine, CEO of India, CBRE, said, “The development signifies a continuity of cautious monetary policy. This prioritizes the objective of achieving an equilibrium between curbing inflationary pressures and nurturing a robust economic environment. Maintaining the status quo of the
repo
rate is likely to ensure sustained momentum within the real estate sector, thereby benefiting borrowers. Furthermore, the policy decision is expected to contribute to a broader affirmation of consumer confidence.”
Director of GLS Group Surinder Singh said, “The
RBI
‘s decision to keep the repo rate unchanged at 6.5 per cent aligns with expectations and is greatly welcomed. This move towards maintaining stability in lending rates bodes well for the real estate sector, which has been consistently growing. It also provides added support to consumers, ensuring economic growth remains robust.”
Samir Jasuja, CEO and MD of PropEquity, said, “The decision of RBI is on expected lines. With overall inflation falling within the RBI range, a policy rate cut may not be very far away. Real estate prices have gone up substantially, and a future rate cut will give much higher purchasing power to the customer, which is the need of the hour. Such a move would be welcome news for homebuyers across cities, including metro cities as well as tier II and III cities.”
However, a few real estate experts say the unchanged home loan rates alone are insufficient to induce new vibrancy in the affordable segment. They say the government should soon introduce further incentives to support it, and with the mandate of a stable government now manifest in an unchanged monetary policy, the housing sector’s overall growth momentum will continue.
