RBI announced its monetary policy on Thursday. It made some key announcement and here’s what real estate industry thinks of them.
By Varun Singh
The RBI on Thursday made the real estate industry happy for the 10th consecutive time.
How, by maintaining a status quo on the rates. Here’s how the real estate industry reacted to the RBI announcements.
Anuj Puri, Chairman – ANAROCK Group
Amid the ongoing impact of the Omicron variant of Covid-19 across the world and in India,
RBI has once again decided to keep the repo rates unchanged at 4% and reverse repo rate at 3.35% while maintaining an ‘accommodative’ policy stance. This is the tenth consecutive time that the RBI maintained status quo amid the current uncertainties for continued growth. The fact that the repo rates remain unchanged is good for home loan borrowers as the floating retail loan rates, which are directly linked to external benchmark repo rates, will continue at what are the lowest levels in the last two decades. A continuation of this low interest rate regime supports the overall environment of affordability for some more time and is very welcome. While the window of opportunity for homebuyers to avail low interest rates has been extended for some more time, it is unlikely to prevail for much longer – sooner or later, repo rates will rise. Overall, this courageous and progressive stance by the RBI factors in real-time ground realities and flies in the face of industry expectations that the repo rates would be increased.
Dr. Niranjan Hiranandani, Vice Chairman, NAREDCO and MD, Hiranandani Group.
The RBI MPC has guided the Indian economy through a difficult time, ensuring that the pandemic did not hurt growth prospects even while exercising control over issues such as inflation. In line with the efforts to limit disruption to economic activity, for the tenth consecutive review, the RBI MPC maintained status quo on key policy rates, while also maintaining an accommodative stance. This reflects on the consistency which is seen vis-à-vis the Finance Minister’s Budget Speech and Monetary Policy announcement. The RBI has remained steadfast in ensuring trust in domestic financial system, today’s monetary policy review supports economic growth, creates a positive scenario for robust retail lending as also private capital investment, even as it continues to insulate the Indian economy from global spillovers. RBI has retained its growth projection at 9.2 per cent and inflation at 5.3 per cent for the current financial year. For the home buyer, favourable market dynamics in terms of home loan interest rates continues. However, trends indicate that this ‘historic low’ may not continue for long, and home seekers would be advised to pick up the home loan while still at such low rates.
Sandeep Runwal – President, NAREDCO Maharashtra and Managing Director, Runwal Group
In view of inflationary concerns, the Reserve Bank of India (RBI) has continued to maintain the status quo on key policy rates. It has taken a proactive stance to ensure liquidity. The MPC also maintained that the ‘accommodative’ stance will continue as long as needed. This will provide the required fuel for the growth of the economy along with the real estate industry, which is allied with several other sectors. As the industry is recovering from the impact of the 3rd wave of Covid, it is important to support growth and spending. By keeping the interest rates unchanged, RBI has clearly indicated that it is looking for sustainable growth and boosting consumer sentiments.
Gautam Thacker, President, NAREDCO – Neral-Karjat Unit
RBI keeping the policy rates unchanged is a welcome move aimed at further strengthening the Economy post covid it is targeted to keep the buying sentiments high. In short, it’s a very positive decision for the Indian Economy.
Haresh Mehta, CMD, Rohan Lifescapes
The progressive announcement made by the RBI, to keep the repo rates unchanged is very thoughtful and motivating. The decision on holding on to the existing rates will help the real estate sector to gain more demand. The fact that the rates will remain unchanged is definitely falling in the favour of all the home loan borrowers as the affordability quotient will continue to be there in the current time of uncertainty. With the continuation of the same old rates, it is expected that consumer sentiments will be highly optimistic when it comes to buying a home. The consumption in the residential space is expected to expedite with this move of the RBI. Overall, the decision taken by RBI is warmly welcomed as it will definitely be contributing towards the growth of the country’s GDP.
Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory
“Keeping the Repo Rate & Reverse Repo Rate intact was on expected lines. This was needed not only because of the increased government borrowing but also to accelerate the current economic growth trajectory. This is good news for the housing market as historically a low interest-rate regime has always pushed the real estate market in India.
Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Treasurer, CREDAI MCHI
“RBI’s decision to continue with their accommodative stance keeping in mind the inflationary concerns was on expected lines. The low-interest rates have been a crucial factor in the revival of the demand in the real estate sector. In the past few months, the buyers have made the most of the rock-bottom interest rates on home loans along with offers from good developers. This might also be the last opportunity for the homebuyers to purchase property with low-interest rates before RBI decides to hike it in any of their future bi-monthly policies. Also, to keep the prices down on the account of rise in raw materials prices will be a huge challenge in front of the developers.”
Shraddha Kedia-Agarwal, Director, Transcon Developers
“RBI maintaining status quo on key policy rates was expected given the inflationary concerns in recent months. The decision will help to sustain liquidity for some more time which will augur well for the real estate sector and the overall economy. The low-interest rates for the last few months have already given a boost to the real estate sector upticking the demand in the last few quarters and enhancing the confidence of the homebuyers. The decision will therefore help to keep up the momentum going forward as well.
Bhushan Nemlekar, Director, Sumit Woods Limited
The RBI’s decision to maintain its accommodative stance was on the expected lines considering the outlook for inflation and growth. The Government has always taken affirmative measures to revive the economy and alleviate the Covid-19 impact with sustained fiscal & monetary support. The prevailing low home loan rates are already enticing for homebuyers which have immensely benefited the real estate sector. This decision will create further demand and sustain the growth momentum in upcoming months.
Jitesh Lalwani, President, Home Sync Real Estate Advisory Services
We welcome the RBI’s decision to continue with their accommodative stance keeping in mind the economic concerns in nea r future. The measures announced for liquidity amplification in the economy are indeed a progressive step and were much needed. Real estate has been severely hit during the pandemic and the recent Budget announcements and the RBI’s decision today will boost the sector to cope with markets’ uncertainties.
