Property demand to remain buoyant with pause in rate hikes: Developers

Following a series of six consecutive rate hikes, the RBI has maintained the policy rate at 6.5% for the second consecutive time, which is good news for homebuyers and real estate.

Homebuyers seem to be a bit happy that the home loan rates will not get increased at least in the short term, while the real estate sector hopes that it will continue to see higher sales in view of this move.

Commenting on the same, Dr Niranjan Hiranandani, National Vice Chairman, NAREDCO, said, “India Inc hails accommodative stance of RBI with recurrent pause in repo rate hike at 6.50% as record high inflation eases off gradually. As a snowball effect, respite in homeloan interest rate will augur well to fuel uptick in housing sales across the segments. Now, the discerning homebuyers should avail the benefits of cooling inflation, stable home loan rates, conducive real estate market dynamics in the backdrop of buoyancy in GDP growth, domestic demand and availability of sufficient liquidity. With the festive season in tailwinds, a hiatus in interest rate hike will act as a growth catalyst and boost sales velocity.”

Industry experts believe that homeowners would be relieved for the time being by the RBI decision to retain the status quo on the repo rate.

“Home loan rates will remain steady if the repo rate is not increased. It might also aid in addressing a different rupee-related difficulty. The nation has seen a surge in investment activity over the last several months, which is indicative of an economic recovery. India continues to be the beacon of hope and an ocean of opportunity amid a number of other short-term global macro concerns, such as geopolitical tensions, global financial market volatility, crude oil prices, supply side disruption, and tightening global financial conditions, and RBI’s move is expected and appropriate,” said Shiwang Suraj, Founder & Director of InfraMantra.

Also Read: RBI keeps repo rate unchanged: How this will impact homebuyers

Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd, said, “We appreciate the change in policy approach by the apex bank and decision to maintain the policy rate, instead of voting for another increase. This demonstrates a positive intent towards supporting the housing market and benefiting homebuyers. Home loan borrowers have embraced the previous interest rate hikes, and as long as the home loan interest rates hover around 9% per annum, it is unlikely to have a significant impact on housing demand.”

Sanjay Sharma, Director, SKA group, said, “Repo rates were left unchanged; the policy is extremely good for the markets by keeping rates constant and maintaining an accommodative stance. However, there are still some challenges in the real estate market that must be addressed. The value of the real estate as an asset will continue to grow and strengthen with time as the sector is moving rapidly towards meeting the demand with quality supply.”

“As expected, the RBI has decided to keep the repo rate unchanged for the second time in a row. This is good news for the real estate sector and the outlook for homebuyers, who are looking to buy property via home loans in the near future, remains favourable. This announcement can provide a booster in maintaining the momentum in the housing sector which has so far been firing on all cylinders,” said Subhash Goel, MD, Goel Ganga Developments.

Vikas Garg, Joint Managing Director, Ganga Realty, said, “The decision to keep the repo rate unchanged is along the expected lines. The inflation rates have plummeted and demand for housing and commercial realty segments continues to rove in an upward growth trajectory. We welcome the RBI’s monetary policy on repo rates as they have factored in the economic scenario, variables, and possibilities and taken a praiseworthy decision. It will churn out good results for the real estate sector.”

Saransh Trehan, Managing Director, Trehan Group, said, “Maintaining the status quo of repo rates will also play an important role in holding the home loan mortgage rates. The residential real estate demand has been rising with record-breaking home sales, especially in the National Capital Region. The decision will help in keeping the property demand buoyant and also motivate new homebuyers to invest in real estate markets. We hope that the decision helps in consolidating the Indian economy, lowering inflation rates, and achieving the FY24 GDP growth forecast of 6.5%.”

“The real estate sector that has been riding on the growth momentum since 2022 will observe more business since it will now bring respite to the homebuyers. Moreover, the real estate sector is currently conducive with good projects, favourable market conditions and upcoming festive season,” said Ashish Narain Agarwal, Founder and CEO at PropertyPistol.com.

However, only maintaining the status quo on policy rates doesn’t seem to be enough. Some developers are also expecting the repo rate to get lowered in the months to come to give a boost to the real estate sector.

Atul Banshal, Director-Finance, Omaxe Ltd, said, “As anticipated, the RBI has displayed a growth-supportive policy stance. However, following a series of successive policy rate hikes, the real estate sector had anticipated some relief from the central bank in the form of a modest rate cut. Such a move would have bolstered demand and, subsequently, the overall economy. Consequently, we maintain our expectation that the RBI will opt for a policy rate reduction in the next review meeting, providing a much-needed impetus to various sectors, including real estate, and fostering economic growth.”

Manoj Gaur, President, CREDAI NCR, and CMD, Gaurs Group, has similar views. “The RBI decision to maintain the status quo on the repo rate is welcome news. This would surely be a relief for the real estate sector which is seeing a great upturn over the last 5-6 months. This upswing would surely be maintained with this measure. However, we look forward to lowering of the repo rate in the months to come which will boost the real estate sector and as well as the country’s economy,” he said.