The RBI has decided to keep the Repo Rate that shakes the interest market unchanged this time. The Repo Rate today stands at 6.50%.
With no change in the Repo Rate the banks won’t be impacted adversely, the lending process is expected to be not impacted too. Here’s why it is a good news for homebuyers, especially those who seek to buy a home availaing a Home Loan Interest.
Dr Niranjan Hiranandani -National Vice Chairman -NAREDCO stated that, “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. Notedly, rise in purchasing powers of Indian consumers as they tap into an alternative income avenue through capital markets, hike in salaries, job opportunities, gains in rental income are acting as funding streams for the homebuyers to buy residential assets. The supply of new housing stock is in tandem to the uptick in housing demand across property markets. Indian homebuyers are highly skewed towards luxury lifestyle as we witness rise in emerging first-gen millionaires, due to startup boost and enhanced business capacity utilization. This phenomenon prompts new homebuyers to take the plunge and secure the ownership home on the grounds of social security and stability.The stability reflected in rupee currency compared to others amidst geo-political storming has enabled India to retain its tag of fastest growing economy. Going forward, Industry anticipates a fall in interest rates as the Government and regulatory apex body re-orients their focus on GDP growth barometer.”
Dharmendra Raichura VP Finance at Ashar Group said, ”We are pleased that the RBI has decided to maintain REPO rates unchanged. Considering that inflation appears manageable, the Market expects that RBI will likely keep unchanged RERO rates throughout 2023. Recently we saw GDP numbers come out, which says Q4 GDP growth of 6.1% beats estimates, and overall FY23 growth at 7.2%. These factors indicate that the Indian economy is stable and doing well. Homebuyers would be much relieved by this decision because the market has been steady following a period of instability. There is a growing demand for real estate, and buyers want to buy properties from reputable developers. We are optimistic that RBI will consider reducing the REPO rates in the upcoming monetary policy, which will great relieve the Home buyers and the Real estate industry.”
Anuj Puri, Chairman – ANAROCK Group, said, “As was anticipated, the RBI has decided to keep the repo rates unchanged at 6.5%. This gives some respite to prospective homebuyers looking to avail of home loans in the near future. The unchanged repo rate can help maintain the momentum in housing sales, which has so far been firing on all cylinders in 2023. As per ANAROCK Research, we saw housing sales in first quarter of 2023 scale new heights, breaching the one lakh mark at 1.14 lakh units across the top 7 cities. Given the current unchanged rates, the outlook for those looking to buy their first home via a home loan soon remains favourable. Interest rates from most banks will continue in single digits. With top banks, they currently hover between 8.7 to 9.65%. A future rate hike, if any, may push the rates into double digits. The persisting financial instabilities in advanced economies of the world may have repercussions in India, causing the RBI to take such a step to face these headwinds.”
Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO- Maharashtra, said, “Regarding the latest RBI Monetary Policy statement, it was mentioned that the real estate sector was given a much-needed break by the RBI’s decision to maintain the repo rate constant. This choice would claim the same EMIs while bringing stability to the home loan category. It will keep the real estate market in a buying mood and could increase the mid-segment housing market. We also anticipate no change in the demand for upscale and exclusive dwellings. Despite the good effects of this choice, the governor of the RBI has indicated that this action may only offer short-term solace and may be required to stop the nation’s inflationary trend. This decision of keeping the rates unchanged will enable the real estate sector to consistently grow.”
Atul Banshal, Director-Finance, Omaxe Ltd, said, “We welcome the RBI’s decision to maintain the status quo on key policy interest rates. 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.”
Vimal Nadar, Head of Research at Colliers India said, “Indian economy stands out strong amidst weakening global economic growth, at an estimated 6.5% for the year 2023-24. Headline inflation continues to lower, but still poses upside risks on back of volatile global conditions. RBII’s unabated commitment towards ‘withdrawal of accommodation’ is on expected lines and essential in the current uncertain global economic environment, marred with tight financial conditions, elevated inflation & geopolitical tensions. RBI’s move to keep the repo rate unchanged at 6.5% reinforces the Central Banks’s effort to support domestic growth and creating a conducive lending ecosystem. The latest inflation at 4.7% is encouraging, however needs to be aligned with other high-frequency indicators to buoy growth in a sustainable manner. As home loan rates are already at elevated levels of 9% and above, this is a significant breather for lenders, developers & homebuyers. First time homebuyers will be better placed to make their home buying decision in a stable lending rate regime. Fence sitters in the affordable & mid segment will have greater visibility of their EMIs & thus effect buying.”
Amit Goyal, Managing Director, India Sotheby’s International Realty, said, “In line with expectations, the Reserve Bank of India (RBI) has maintained the policy rate at 6.5% for the second consecutive time, following a series of six consecutive rate hikes. The RBI’s decision reflects their cautious approach in light of the persistent inflationary pressures and their potential impact on domestic consumption growth.However, the positive aspect is that the pause in rate hikes will instil a sense of optimism among borrowers and we expect the housing sales momentum to continue.”
Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd, “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.”
Also Read: CREDAI Urges RBI to Maintain Repo Rate amid Increasing Construction Costs and Rising Housing Prices
