The Maharashtra government has approved the implementation of the SNA-SPARSH (System of Integrated Quick Transfers) framework for effective execution of the Pradhan Mantri Awas Yojana (Urban) and PMAY (Urban) 2.0 schemes.

This move is aimed at ensuring faster, transparent, and real-time transfer of Central funds for housing projects through direct integration with the Reserve Bank of India (RBI) systems. The decision aligns with the Central Government’s push for a modernized, technology-driven fund management structure.

From SNA to SNA-SPARSH: A Shift Toward Real-Time Efficiency

The new system replaces the existing Single Nodal Agency (SNA) model with the SNA-SPARSH model, following the Government of India’s directive dated July 13, 2023.

Under this framework, Central and State cash management systems are integrated using three major digital platforms:

• Public Financial Management System (PFMS)
• State Integrated Financial Management Information System (IFMIS)
• RBI’s e-Kuber system

The unified setup allows for real-time, traceable, and quicker fund transfers for Centrally Sponsored Schemes (CSS) like PMAY, reducing administrative delays and leakages.

Dedicated RBI Accounts for Maharashtra’s PMAY and PMAY 2.0

As per the Government Resolution (GR) issued by the Housing Department, new independent drawing and disbursing accounts have been opened with the Reserve Bank of India for both PMAY (Urban) and PMAY 2.0.

These accounts will handle funds for various scheme components such as Affordable Housing in Partnership (AHP), Beneficiary-Led Construction (BLC), In-Situ Slum Redevelopment (ISSR), and Capacity Building, Social Audit, and IEC activities.

PMAY (Urban) — Managed by MHADA

• Nodal Agency: Maharashtra Housing & Area Development Authority (MHADA), Mumbai
• Finance Controller: Drawing & Disbursing Officer (DDO) No. 8101710009
• RBI Accounts: Six separate accounts created for PMAY (Urban) components
• Date of account activation: Between February and October 2025

PMAY (Urban) 2.0 — Managed by Housing Department PMU

• Nodal Agency: State-Level Project Management Unit (PMU), Housing Department, Mantralaya, Mumbai
• Under Secretary & Joint Chief Officer: DDO No. 8101710010
• RBI Accounts: Four accounts for PMAY 2.0 sub-components
• Date of account activation: September 12, 2025

The accounts were opened with consent from the Finance Department and the Accountant General of Maharashtra.

Objective: Faster, Accountable, and Transparent Fund Flow

By implementing SNA-SPARSH, Maharashtra joins a select group of states that have migrated to this next-generation financial management architecture. The key goals include:

• Real-time visibility of fund utilization across all project levels
• Elimination of idle funds and duplication
• Faster disbursement to beneficiaries and implementing agencies
• Stronger financial governance and audit trail

Officials stated that this will significantly enhance efficiency in executing housing projects under PMAY (Urban) and PMAY 2.0—particularly important as Maharashtra leads in urban housing demand and beneficiary-linked construction projects.

Also Read: Relief For MHADA Redevelopment And PMAY Projects

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Bidding and Property Details

The property, which bears Survey No. 34, consists of N.A. plots along with three G+1 storied residential bungalows. The total area of the land is 3,832.36 square meters. Bids must be submitted in separate sealed envelopes , with the last date for receipt being September 9, 2025, by 3:00 PM IST. The bids will be opened on the same day at 4:00 PM IST. Prospective bidders can inspect the property up to September 8, 2025.

Key Requirements for Bidders

A mandatory Earnest Money Deposit (EMD) of ₹10,00,000 is required to be submitted with the bid. The EMD must be paid via Demand Draft or RTGS in favor of “Reserve Bank of India, Fort Mumbai”. Bidders are also required to provide a photo identity proof. All relevant communication will be conveyed via email/SMS.

Terms of Sale

The successful bidder will be required to pay 25% of the winning bid value within 10 days of the sale confirmation. The remaining 75% must be paid within 90 days thereafter. The RBI reserves the right to reject any or all bids without assigning any reason. All expenses related to the transfer, including stamp duty, registration charges, society dues, and municipal taxes, will be the responsibility of the purchaser.

Also Read: RBI Cuts Repo Rate by 25bps: A Boon for Homebuyers and the Real Estate Sector

The post RBI to Sell Lonavala Bungalows with ₹6.55 Crore Reserve Price appeared first on Square Feat India.

While inflation remains subdued, several headwinds persist: corporate investment remains weak, and industrial output has slowed significantly, undermining growth momentum The Times of India.

Industry Voices: Mixed Signals on the Rate Path Ahead

Akhil Saraf, Founder & CEO, Reloy

He argues that, with inflation low and private investment depressed, a “substantial rate cut” is warranted. Lower rates, he says, would revive borrowing, boost demand and restore private-sector confidence — a “decisive push” at a critical juncture.

Vimal Nadar, National Director & Head of Research, Colliers India

Nadar notes that while the RBI has already delivered 100 bps of easing in 2025, including the June move to 5.50%, the bank is likely to maintain a neutral stance for now. Lower financing costs will benefit real estate developers, lenders and homebuyers—especially ahead of the festive housing season in late 2025.

Shrinivas Rao, CEO, Vestian

Rao emphasizes external headwinds, notably U.S. tariffs, urging caution. He expects the RBI to hold rates steady in the near term to maintain macro resilience but leaves room for rate cuts if inflation continues its downward trajectory.

Piyush Bothra, Co‑Founder & CFO, Square Yards

Bothra concurs on a wait-and-watch posture at 5.50%, given global uncertainties and incomplete transmission of earlier cuts. He sees a 25 bps rate cut in October as plausible—timed to support housing demand during the festive quarter.

Macro Context: The Tightrope Between Growth and Inflation

• Inflation trends: Inflation has moderated sharply—from ~3.16% in April to ~2.10% in June—providing the RBI room for further easing Reuters+4Reuters+4Reuters+4Reuters+1Jiraaf+1.
• Growth signals: While Q1 FY26 GDP expanded ~7.4%, industrial production slowed to a 10‑month low (~1.5%), raising concerns about underlying demand The Times of India.
• Global uncertainties: Elevated U.S. tariffs and trade shot at India pose headwinds; economists expect the RBI to monitor spillover risk before easing further ReutersThe Economic Timesdeccanherald.com.
• Policy shift: The RBI moved from an accommodative stance to “neutral” in June, suggesting further action would depend on incoming data rather than past momentum Reuters.

What Lies Ahead

• Markets largely expect the repo rate to stay at 5.50% in August, with approximately 75% of economists anticipating a hold during the MPC meeting on August 6 Reuters.
• Some forecasts—including one from SBI—suggest a 25 bps reduction later in August, to stimulate credit and give an “early Diwali” boost ahead of the festival season The Economic Times.
• Others, including Colliers, Vestian and Square Yards, see October as a more likely date for the next cut, contingent on inflation durability and full transmission of past rate moves.

Summary Table

Final Word

The RBI enters its August 6 Monetary Policy Committee meeting with subdued inflation firmly under control—but with growth signals and investment trends remaining worryingly soft. While most analysts expect the repo rate to remain unchanged at 5.50%, an October rate cut of 25 bps remains on the cards if inflation stays low and the RBI sees positive transmission.

Also Read: RBI Cuts Repo Rate by 25bps: A Boon for Homebuyers and the Real Estate Sector

The post RBI Expected to Hold Rates at 5.50%, but Experts See Case for Further Cuts appeared first on Square Feat India.

Lower home loan interest rates will provide much-needed relief to homebuyers by reducing their equated monthly installments (EMIs), making property purchases more affordable. Industry leaders believe this decision will drive housing demand, boost market activity, and encourage more investments in real estate.

A Positive Step for Homebuyers and Developers

Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO Maharashtra, welcomed the decision, stating, “The RBI’s decision to cut the repo rate by 25 basis points to 6.25% is a welcome step for the real estate sector, especially as this is the first reduction since February 2023. Lower home loan interest rates will provide much-needed relief to homebuyers, making property purchases more affordable by reducing EMIs. This move is expected to drive demand for housing, boosting market activity and encouraging more people to invest in real estate. It also enhances confidence among both buyers and developers, leading to a stronger and more dynamic sector. Developers will benefit from easier access to funds, helping them complete projects faster and meet the rising demand. At the same time, this decision aligns with the government’s focus on economic growth, supporting long-term stability in the housing sector. This rate cut is a much-needed push that will help both homebuyers and developers while driving positive momentum in real estate.”

The cut in the repo rate is expected to reduce borrowing costs, which will not only make home loans more affordable for buyers but also ease financial stress for developers.

Sunny Bijlani, Joint Managing Director of Supreme Universal, emphasized the benefits for both homebuyers and developers, saying, *“The RBI’s decision to cut the repo rate by 25 bps from 6.50% to 6.25% in February 2025 is a significant boost for the real estate sector, particularly for homebuyers and developers. Lower borrowing costs translate into reduced home loan EMIs, making property purchases more accessible, especially in the premium and luxury segments. This move will not only ease the financial burden on existing homeowners but also encourage new buyers to enter the market, strengthening overall demand.

For developers, the rate cut means lower financing costs, enabling them to fund projects more efficiently and accelerate delivery timelines. With capital becoming more affordable, we expect renewed momentum in high-end real estate, where buyers seek quality living spaces with long-term value appreciation. The increased liquidity and affordability will help clear unsold inventory, drive sales, and sustain the sector’s upward trajectory in 2025.”*

Encouraging First-Time Buyers

Experts believe that this rate cut will be especially beneficial for first-time homebuyers. Lower interest rates mean reduced financial burdens, making homeownership more attainable, particularly in the mid and premium housing segments.

Dharmendra Raichura, VP & Head of Finance at Ashar Group, highlighted the advantages for new buyers, stating, “The Reserve Bank of India’s (RBI) decision to reduce the repo rate by 25 basis points to 6.25% is expected to have a positive impact on the real estate sector, particularly for first-time homebuyers. With lower home loan interest rates, our homebuyers will find housing more affordable, especially in the mid and premium segments. This reduced financial burden will boost property demand, encouraging more purchases and enhancing market liquidity. Developers will also stand to benefit from improved cash flow and reduced financing costs. This will enable us to stimulate construction activity, leading to more real estate projects and employment. This policy shift, combined with stabilizing inflation and accelerating urbanization, creates a favorable environment for our customers to invest in their dream homes. With growing market confidence, developers are committed to delivering long-term value and success to our customers in 2025.”

The Road Ahead

With the RBI’s rate cut, banks and financial institutions are expected to pass on the benefits to borrowers, leading to a reduction in home loan interest rates. This will likely trigger an uptick in home sales, particularly in metro cities where property prices have been rising. The move also comes at a crucial time when urbanization is accelerating, and the demand for quality housing continues to grow.

While the real estate sector has seen steady demand over the past few years, affordability has been a key concern, especially for first-time homebuyers. With the repo rate cut, housing finance is expected to become more accessible, allowing more people to enter the market and invest in their dream homes.

Overall, this decision is a strong signal from the RBI in support of economic growth, and experts believe it will drive long-term stability in the real estate sector. As homebuyers enjoy lower EMIs and developers gain easier access to funding, the housing market is set to gain fresh momentum in 2025.

Also Read: RBI interest ratees

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Stability in Borrowing Costs

For developers and homebuyers alike, the unchanged repo rate ensures stability in borrowing costs. With the rate at 6.5%, developers benefit from consistent financing conditions, allowing them to plan projects and investments with greater certainty. Similarly, homebuyers can count on steady mortgage rates, which helps maintain buyer sentiment in a challenging economic environment.

The neutral stance from the RBI reflects a careful balancing act—keeping inflation under control without stifling economic growth. While this strategy helps create a stable economic environment, it also means that home loan borrowers will continue to pay relatively high Equated Monthly Installments (EMIs), limiting affordability for many potential buyers. This dampens hopes for an increase in demand, particularly among first-time homebuyers who could have been encouraged by lower interest rates.

Developer Optimism Amid Government Initiatives

Despite the absence of a rate cut, developers remain cautiously optimistic about the sector’s growth trajectory. Government initiatives, including infrastructure development and urbanization, continue to support the real estate market. The sector has already seen significant investments, particularly in the residential segment, thanks to the current interest rate levels.

The neutral stance is seen as a boon for the affordable and mid-segment housing markets. It ensures that demand remains stable, even as the sector contends with inflationary pressures and price fluctuations in raw materials. Developers also hope that the government will offer more incentives, such as tax relief and policy support, to further stimulate demand.

“The RBI’s decision to maintain the repo rate at 6.5% reflects a measured approach to managing inflation without hampering economic growth. The neutral stance provides much-needed stability in the financial markets, which is crucial for the real estate sector. The unchanged rates will help maintain buyer sentiment, especially in the affordable and mid-segment housing categories,” said the President of NAREDCO Maharashtra.

The RBI’s approach is also seen as a positive signal for commercial real estate, with steady borrowing costs supporting momentum across both residential and office segments. Developers continue to launch new projects, and investor confidence remains high, particularly in grade-A office spaces.

Benefits for Luxury and Holiday Homes

While the neutral stance on rates ensures stability for most segments, it is especially favorable for the luxury and holiday home markets. Stable interest rates enhance buyer confidence, making it easier for potential investors to commit to high-end real estate. Markets in emerging areas such as Alibaug and Lonavala, which have witnessed increasing interest in luxury properties, stand to benefit from this stability.

“The decision to keep the repo rate unchanged is a welcome move, especially for the luxury and holiday home markets. Stability in interest rates enhances buyer confidence, particularly in emerging markets like Alibaug and Lonavala, which have been witnessing increased interest in these segments,” said the Founder of Iraah Lifespaces.

As buyers in premium segments are less sensitive to changes in interest rates, they are more likely to proceed with transactions despite the overall economic uncertainty. This stability also helps developers plan innovative and high-value projects without the pressure of fluctuating interest rates.

Challenges in Affordable Housing

The absence of an expected rate cut is disappointing for those in the affordable housing sector, where lower interest rates could have spurred greater demand. Higher home loan rates continue to impact the affordability of homes for the middle and lower-income segments. Industry leaders had hoped that a reduction in the repo rate would ease liquidity and provide an additional push to the housing sector, particularly for affordable housing projects.

The Co-Founder and CEO of Build Capital emphasized that while the neutral stance is a positive for maintaining steady borrowing costs, the industry also looks forward to long-term measures that could enhance liquidity and credit flow in the market.

“The RBI’s neutral stance and focus on balancing inflation and growth are positive signals for the real estate sector, ensuring stable home loan rates as well. With repo rates unchanged, stable borrowing costs will sustain momentum across residential and commercial segments. We urge the RBI to consider long-term measures to enhance liquidity and credit flow in the industry,” said the CEO of Build Capital.

Liquidity Support via CRR Cut

In a related move, the RBI reduced the Cash Reserve Ratio (CRR) by 50 basis points to 4%. This reduction enhances the liquidity available to banks, allowing them to lend more to the real estate sector. While the rate cut was not as significant as many hoped, the CRR reduction is expected to provide a boost to credit disbursements, especially in sectors like real estate, where financing plays a crucial role.

Anuj Puri, Chairman of ANAROCK Group, noted that while a repo rate cut would have provided a more immediate stimulus to housing sales, the CRR reduction could still have a positive impact by improving credit flow. He added that the sector was already buoyed by pent-up demand and improved affordability, with many expecting that the final quarter of the financial year would continue to show strong housing sales.

Impact on Major Markets

The unchanged repo rate ensures that large markets such as Mumbai and Pune will continue to see sustained demand, even as home prices rise. As per reports, average housing prices in major cities had already increased by 23% in the third quarter of 2024. In this scenario, the stability in interest rates ensures that homebuyers are not deterred by rapidly rising costs, while developers are not forced to hike prices further.

“Stability in interest rates is particularly beneficial for high-value markets like Mumbai and Pune. With steady interest rates, buyer confidence will likely increase, driving steady demand and supporting sector growth,” said the Joint Managing Director of Supreme Universal.

In Mumbai, the residential real estate market is seeing strong momentum, with low unsold inventory and a continued demand from end-users. Infrastructure projects such as metro expansions are expected to further boost the demand for housing in key residential areas.

Looking Ahead

While the RBI’s decision to hold the repo rate steady was expected, it has left some segments of the real estate market hoping for more decisive action. As developers continue to navigate a challenging economic environment, they are calling for more government support, particularly in terms of tax incentives, faster approvals, and more favorable liquidity conditions. The sector’s optimism remains high, buoyed by robust demand across urban markets and government-backed infrastructure initiatives.

“The RBI’s decision to retain the repo rate at 6.5% is a balanced approach to manage growth and inflation. With India’s GDP expected to grow at 6.5–7% in FY 2024-25, this stability is vital for maintaining economic momentum. A steady rate ensures consistent repayment terms, which increases the confidence of homebuyers and encourages investments in the sector,” said the Vice Chairperson of Nahar Group.

Overall, the RBI’s neutral stance on the repo rate is seen as a double-edged sword for the real estate sector. While stability in borrowing costs provides confidence to developers and homebuyers, the lack of a rate cut means that affordability challenges remain for many. Nevertheless, the sector remains resilient, with stakeholders expressing hope that the government will continue to offer supportive policies to sustain growth in the coming years.

Also Read: RBI MPC Meeting Begins Repo Rate Likely to Remain Unchanged, with Real Estate Sector Watching Closely

The post RBI’s Neutral Stance on Repo Rate: What It Means for India’s Real Estate Sector appeared first on Square Feat India.

Given the prevailing inflationary trends and the global economic landscape, market experts believe that the RBI’s decision will focus on maintaining stability. A stable repo rate is crucial for controlling lending rates, which directly impact consumer spending and corporate investments.

The real estate sector, in particular, is watching the MPC’s decision closely, with many anticipating a potential rate cut in the near future. The sector has shown resilience, but industry leaders emphasize that a reduction in the repo rate could provide a much-needed boost, especially for homebuyers in the affordable housing segment.

Industry Reactions to the Upcoming Decision

Manoj Gaur, CMD of Gaur Group and President of CREDAI NCR, stated that if the RBI maintains the repo rate, it will offer stability to the real estate market, helping build confidence among both developers and homebuyers. He added that while a rate cut could relieve homebuyers, particular attention must be given to the affordable housing segment.

Pradeep Aggarwal, Founder and Chairman of Signature Global (India) Ltd., echoed these sentiments, pointing out that the stability in the monetary policy has contributed to India’s resilience amid global uncertainties. He believes that any easing of interest rates could further stimulate the demand for housing, particularly in urban areas.

Amit Modi, Director of County Group, expressed optimism about a potential rate reduction, especially for the affordable housing market. He noted that while the luxury housing market may not see significant changes, a rate cut could reignite demand in the mass housing sector.

Impact on Homebuyers and Investors

Sanjay Sharma, Director of SKA Group, emphasized that a reduction in the repo rate would make home loans more affordable by lowering EMIs, thereby making homeownership more accessible. This, he argued, would not only strengthen consumer confidence but also accelerate growth in the real estate sector.

Rajjath Goel, Managing Director of MRG Group, pointed to the impressive 32% surge in housing prices in Delhi-NCR, attributing it to large-scale infrastructure projects and increasing buyer sophistication. He said that a rate cut would bring further stability to the market and attract long-term investments.

Mohit Kalia, Vice President of Raheja Developers, expressed similar views, stating that a reduction in the repo rate would ease the burden on homebuyers and stimulate investment. He added that such a move could help stabilize real estate prices, which have been fluctuating in recent months.

Sectoral Growth and Future Prospects

Dr. Gautam Kanodia, Founder of KREEVA and Kanodia Group, said that lower interest rates would act as a catalyst for further housing demand, particularly in emerging markets and smaller cities. This, he believes, would strengthen the housing sector’s growth trajectory.

Saurabh Saharan, Group Managing Director of HCBS Development, highlighted that the stability in the market over the past two years, driven by the RBI’s consistent approach, had been crucial for investor and homebuyer confidence. He is hopeful that a potential rate reduction would further encourage people to enter the market.

Ravindra Gandhi, Managing Director of Tirasya Estates, noted that the real estate sector had flourished, particularly in Tier-2 cities like Goa, Lucknow, and Chandigarh. He said that any move by the RBI to reduce or maintain the rate would continue to foster growth in these emerging markets.

Overall Economic Impact

Experts agree that the RBI’s upcoming decision will be pivotal not only for the real estate sector but also for the broader economy. The potential for a rate cut is seen as a step toward fostering economic growth, particularly in sectors like infrastructure and housing, which are key drivers of India’s economic progress.

Piyush Kansal, Executive Director of Royale Estate Group, suggested that the real estate sector had benefited from RBI’s positive stance in the past two years. If the RBI decides to lower rates, it would not only ease the financial burden on homebuyers but also stimulate the overall market, benefiting developers, investors, and consumers alike.

Ashwani Kumar of Pyramid Infratech added that a reduction in the repo rate would help enhance market liquidity and investor confidence, promoting long-term economic stability in the real estate sector.

Looking Ahead

As the RBI prepares to make its announcement, businesses and investors are staying vigilant, planning for the potential easing of financial conditions. The real estate sector is particularly focused on the implications of any rate changes, with many hoping for a move that will further fuel the sector’s ongoing growth.

While the RBI’s decision remains uncertain, the outcome of this MPC meeting is expected to have lasting effects on the Indian economy, particularly in real estate and housing markets, which are closely linked to consumer sentiment and investment patterns.

Also Read: RBI’s Upcoming Monetary Policy Announcement: Implications for the Housing Market

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Affordability Improvements on the Horizon

The affordability outlook for India’s residential market is promising. With the Reserve Bank of India (RBI) signaling a shift towards a neutral stance on monetary policy, a potential rate cut of 50 basis points over the next 12 months is expected to enhance affordability. This, combined with moderate price growth and rising household incomes, will support an improvement in affordability levels across the country’s key real estate markets.

JLL’s HPAI predicts that Mumbai and Pune will approach near-optimal affordability by 2025, meaning that the average household income in these cities will be sufficient to qualify for home loans based on the prevailing property prices. Kolkata, on the other hand, is expected to maintain its lead as the most affordable major city, potentially reaching new affordability peaks.

While Delhi NCR and southern cities like Bengaluru, Hyderabad, and Chennai are also set to see improved affordability, they are likely to remain below their peak affordability levels. However, even these cities will experience better affordability than in previous years.

Record Residential Sales Expected

The anticipated improvements in affordability come at a time of strong growth in India’s residential market. Residential sales are forecast to reach 305,000-310,000 units in 2024, and further growth is expected in 2025, potentially pushing sales to a new peak of 340,000-350,000 units. This surge in sales reflects a growing demand for housing, driven by evolving homeownership dynamics and rising household incomes.

Despite the challenges posed by higher property prices and interest rates in recent years, the market remains resilient, with a sustained bull run driven by strong homebuyer demand. The expected interest rate cuts, alongside moderating price growth and continued income increases, are poised to further fuel the market’s momentum over the next 12-18 months.

Factors Driving Affordability Shifts

JLL’s Chief Economist, Dr. Samantak Das, explains that while the overall economic outlook remains soft, India is still projected to be one of the best-performing large economies globally, supporting steady growth in household incomes. He notes that in 2021, affordability across all major markets reached peak levels. However, rising property prices and persistent interest rates caused affordability to dip in 2022 and 2023. With the anticipated interest rate cuts and moderate price growth, affordability levels are expected to improve to their best since 2022, creating a favorable environment for homebuyers.

The report also highlights the significant growth in real estate prices over the past decade. Hyderabad leads with a 132% price increase since 2011, followed by Bengaluru at 116%, and Delhi NCR at 98%. On the income front, Mumbai has experienced the highest growth, with a 189% increase in household incomes over the same period.

Future Outlook for the Market

Looking ahead, Siva Krishnan, Senior Managing Director at JLL, notes that the combination of strong income growth, potential interest rate reductions, and moderating price growth is expected to improve affordability across India’s key markets. This will ensure continued activity in the residential market, with sustained demand despite ongoing price increases.

JLL’s HPAI will continue to be a vital tool for aligning homebuyers’ affordability with suitable property offerings, ensuring that market demand remains resilient and responsive to economic shifts. The report emphasizes that strategic policy interventions, along with continued improvements in household incomes, will be critical in sustaining demand elasticity in India’s residential real estate market.

Conclusion

India’s residential real estate sector is on track to see improved affordability by 2025, driven by expected interest rate cuts and rising incomes. While cities like Mumbai and Pune are expected to approach optimal affordability, Kolkata is set to maintain its position as the most affordable major market. As residential sales continue to climb, India’s housing market is poised for a resilient and robust future, ensuring strong performance even in the face of rising prices.

Also Read: Oberoi Realty Reports Strong H1FY25 and Q2FY25 Results: Booking Value at ₹2,509.45 Crores; PBT Rises to ₹1,557.50 Crores

The post India’s Residential Market Set for Improved Affordability in 2025, Driven by Interest Rate Cuts appeared first on Square Feat India.

Anuj Puri, Chairman of ANAROCK Group, highlighted that the fundamentals of the Indian economy remain strong despite global challenges. He noted that while a rate cut would have been ideal, the RBI’s cautious stance is understandable given various macroeconomic factors. The unchanged repo rate is expected to help maintain momentum in the housing market during the festive season, especially amid rising housing prices and declining sales.

In Q3 2024, average housing prices in the top seven cities surged by 23%, reaching approximately INR 8,390 per sq. ft., up from INR 6,800 per sq. ft. a year earlier. Despite this price increase, residential sales fell by 11% compared to Q3 2023, and new property launches decreased by 19%.

The consistent home loan rates provide essential support for demand during the festive quarter, with expectations for faster sales momentum in Q4 2024. Last year’s festive quarter saw over 1.27 lakh units sold across the top seven cities, and the current stability in interest rates is anticipated to encourage similar or even higher demand this year.

Dharmendra Raichura, Vice President and Head of Finance at Ashar Group, emphasized that the RBI’s stable approach promotes overall economic stability while keeping inflation in check. The RBI has maintained its inflation forecast at 4.5% for FY2025, alongside a solid GDP growth projection of 7.2%. This steady rate is expected to foster a favorable environment for sustainable growth in the real estate sector.

The Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO Maharashtra Manju Yagnik, stated that the decision to keep the repo rate steady is a positive step for the real estate sector amid ongoing global economic uncertainties. This consistency is particularly important as the festive season, a peak time for home purchases, approaches. By maintaining manageable EMIs, potential homebuyers are encouraged to invest, particularly in the affordable housing segment. Furthermore, this stability benefits developers by improving cash flow and reducing borrowing costs for ongoing projects, ultimately supporting the growth trajectory of India’s housing market.

Also Read: RBI’s Upcoming Monetary Policy Announcement: Implications for the Housing Market

Here’s more comments from the industry.

“RBI’s decision to maintain the policy rate at 6.5% while shifting its stance to ‘neutral’ is a balanced approach that takes into account the current macroeconomic conditions and future outlook. This shift provides much-needed flexibility, allowing the RBI to respond swiftly to evolving inflation trends. For the real estate sector, this decision is particularly important as it signals a steady interest rate environment, which can help sustain the ongoing demand for home loans. A continued focus on stability in the financial ecosystem, along with a projected GDP growth of 7.2% for FY25, provides a positive outlook for the real estate sector.” — Prashant Sharma, President, NAREDCO Maharashtra

“The RBI’s decision to maintain the key policy rates reflects an assessment of the current macroeconomic conditions and future outlook. The continuation of the current policy rate at 6.5% ensures stability, while the potential for rate adjustments based on future inflationary data is a positive signal for the real estate sector.” — Deepak Nair, COO & Co-Founder, The Mentors Real Estate Advisory Pvt. Ltd.

“The RBI’s decision to maintain the policy rate at 6.5% is a strategic move that signals the central bank’s readiness to navigate changing economic conditions. This stable interest rate environment should bolster market confidence, allowing developers and homebuyers to plan with more certainty.” — Anil Mutha, Chief Visionary & Co-Founder, Nandivardhan Group

“The RBI’s decision to maintain the policy rate at 6.5% reflects a nuanced understanding of the current economic scenario. A stable policy rate ensures a favorable lending environment, supporting homebuyers’ sentiment.” — Shraddha Kedia-Agarwal, Director, Transcon Developers

“The real estate market has demonstrated strong performance, fueled by rising demand for homeownership and increasing income levels. We are optimistic about a surge in demand in the coming months.” — Samyak Jain, Director, Siddha Group

“The RBI’s decision to maintain the repo rate at 6.5% helps balance inflation with support for growth. It enhances consumer confidence and encourages investment in property.” — Rohan Khatau, Director, CCI Projects

“RBI’s decision to maintain the policy rate at 6.5% marks a strategic move to balance growth and inflation dynamics. A stable interest rate environment is vital for sustained momentum in housing demand.” — Govind Krishnan Muthukumar, Co-founder & Director, Tridhaatu Realty

“RBI’s decision to maintain the repo rate at 6.5% emphasizes its role in controlling inflation and sustaining economic growth. This will further motivate potential buyers to pursue homeownership.” — Himanshu Jain, VP – Sales, Marketing and CRM, Satellite Developers Private Limited

“The RBI’s decision to hold the repo rate brings cheer among homebuyers, as the relatively affordable home loan interest rate regime will continue during the festive season.” — Rajiv Agrawal, Co-Founder, Saarathi Realtors

The post Repo Rate Unchanged – Housing Set for Festive Season appeared first on Square Feat India.

However, interest rates are just one piece of the puzzle. Property prices also play a critical role in influencing purchase decisions. According to ANAROCK Research, average residential property prices across the top seven cities in India have surged by 46% since 2021. More favorable interest rates could enhance overall affordability, potentially catalyzing housing sales during the upcoming festive season. Increased sales would benefit developers by improving cash flows and lowering borrowing costs for ongoing projects.

Moreover, a rate cut could revitalize market sentiment and attract investors back into the housing sector. Following years of stagnation, investors began returning to the market post-COVID-19, drawn by rising demand and prices. However, many have since adopted a cautious stance as property prices appear to have stabilized. More attractive lending rates could encourage these investors to re-engage with the market.

That said, experts urge caution. While recent cuts by the US Federal Reserve might suggest a similar move by the RBI, the global economic landscape is currently fraught with uncertainty due to ongoing geopolitical tensions. As such, the RBI may choose to maintain the current repo rate until these pressures subside.

As stakeholders await the announcement, the housing market remains on edge, hopeful for a boost that could drive sales and investment in the sector.

Note: This Article is based on the insights of Anuj Puri, Chairman, Anarock Properties

Also Read: Unchanged RBI Repo Rates: A Boon for Real Estate Growth

The post RBI’s Upcoming Monetary Policy Announcement: Implications for the Housing Market appeared first on Square Feat India.

In a resolute move aimed at preserving economic stability, the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) has decided to keep the policy repo rate unchanged at 6.5% for the ninth consecutive meeting. This decision, reached by a 4:2 majority, reflects the central bank’s cautious stance in the face of global economic uncertainties. The impact of this policy on the real estate sector is anticipated to be substantial, influencing borrowing costs and shaping investment sentiments as developers and homebuyers adjust to the current interest rate climate. Here’s how real estate experts are reacting to the announcement.

Here’s what real estate industry go to say on the repo rate.

Dr. Niranjan Hiranandani, Chairman, NAREDCO and Hiranandani Group, “The RBI’s decision to maintain the repo rate unchanged acts as a stabilizing force amidst the current volatile global economic environment. With concerns such as potential U.S. recession, the Bangladesh crisis affecting regional capital flows, and broader global uncertainties, stable home loan interest rates provide much-needed predictability. Although a lower repo rate could have boosted affordable housing, which has been impacted by higher interest rates, the current stability is crucial for NRI investors navigating fluctuating foreign exchange rates. This steady environment creates opportunities for both long-term and short-term real estate investments. However, it is essential for stakeholders to remain vigilant and closely monitor inflation trends, fiscal policies, and global economic developments to adapt their strategies effectively.”

Anuj Puri, Chairman – ANAROCK Group, “The RBI’s decision to maintain the repo rate at 6.5% for the ninth consecutive time is a positive development for the housing industry. This consistency in borrowing costs will encourage more aspiring homebuyers, particularly in the affordable segment, and drive demand in the housing market. Coupled with the recent announcement on indexation benefits, which reduces capital gains tax burdens and enhances the appeal of real estate investments, we can expect increased investor confidence and capital flow into the sector. This combination of stable interest rates and favorable taxation is set to boost housing demand, stimulate project construction, create job opportunities, and contribute to broader economic growth. The high housing sales across the top 7 cities in H1 2024 and the significant rise in residential prices further underscore the positive impact of these measures.”

Dharmendra Raichura, Vice President of finance of Ashar Group, said, “The Reserve Bank of India’s (RBI) decision to maintain the repo rate at 6.5% for the ninth consecutive time demonstrates its dedication to achieving the 4% Consumer Price Index (CPI) target. Despite a slight increase in headline inflation to 5.1% in June 2024, the central bank’s commitment to economic stability is evident. With GDP growth projected at 7% in FY25 and inflation at 4.5%, the stable interest rate environment fosters long-term investments in housing. As a real estate developer, we appreciate the significance of a steady repo rate, which influences borrowing costs and impacts the property market. The consistent repo rate provides a favorable environment for sustainable development and growth in the real estate sector.”

Saket Dalmia, President of India Sotheby’s International Realty, “The RBI’s decision to maintain the policy rate aligns with expectations given the current inflation and global economic scenario. While the near-term outlook for global growth appears positive, challenges persist in the medium term due to demographic shifts, climate change, and geopolitical tensions. Despite these factors, domestic economic activity remains resilient. The MPC’s focus on maintaining a disinflationary stance to ensure inflation aligns with targets while supporting growth underscores the importance of stable interest rates. This stability is particularly beneficial for the real estate sector. We support the RBI’s current stance and anticipate that future rate cuts will further bolster the real estate sector and contribute to overall economic stability and growth.”

Vimal Nadar, Senior Director & Head of Research at Colliers India, “Amid swift changes in global economic undercurrents and a moderate global economic outlook, the RBI’s decision to keep benchmark lending rates at 6.5% for the ninth consecutive time reflects a cautious stance. Although inflation remains above the benchmark of 4%, the RBI’s projection of a 7.2% GDP growth rate for FY 2025, supported by strong high-frequency economic indicators, is promising. The stability in interest rates, along with recent moves to rationalize stamp duty charges and provide concessions for women homebuyers, is favorable for the real estate sector, especially the residential segment. The partial withdrawal of revised LTCG tax applicability also provides room for increased housing sales with minimal tax impact, likely boosting investor and homeowner sentiment throughout 2024.”

Shrinivas Rao, FRICS, CEO of Vestian, “The RBI’s decision to keep the repo rate unchanged at 6.5% for the ninth consecutive time reflects a response to persistent inflation, elevated food prices, and global macroeconomic uncertainties. The steady monetary policy over the past year and a half has provided stability in the real estate sector, fostering demand across all asset classes. This positive momentum is expected to continue as the repo rate is likely to remain stable in the near term, despite rising inflation and increasing geopolitical frictions in the Middle East.”

Prashant Sharma, President, NAREDCO Maharashtra, “We welcome the RBI’s decision to keep the policy repo rate unchanged at 6.5%. This move reflects a cautious yet stable approach to monetary policy amidst global economic uncertainties. For the real estate sector, steady interest rates are a positive signal, creating a conducive environment for both homebuyers and investors. Maintaining this stability is crucial for fostering consumer confidence and ensuring sustained sector growth. We hope this decision will stimulate demand in the housing market, especially in the affordable and mid-segment categories, which are vital for the overall development of the industry.”

Pritam Chivukula, Vice President, CREDAI-MCHI and Co-Founder & Director, Tridhaatu Realty, “We welcome the RBI’s decision to keep the policy repo rate unchanged at 6.5%, which reflects a cautious and balanced approach. The real estate sector, particularly in metro cities like Mumbai, has been steadily reviving, and the current rate stability will help sustain this momentum. Homebuyers will continue to benefit from favorable lending rates, encouraging more investments in the housing market. However, we urge the government to consider additional supportive measures to enhance liquidity and provide long-term stability to the sector. Boosting consumer sentiment should be a focus, as it will drive growth in real estate and related industries.”

Rajeev Ranjan, Co-Founder & CEO, The Mentors Real Estate Advisory Pvt Ltd, “The decision by the Monetary Policy Committee to keep the policy repo rate unchanged at 6.5% is a balanced approach that reflects the current economic landscape. Stability in interest rates is crucial for maintaining buyer confidence and ensuring steady demand in the housing segment. While the unchanged repo rate continues to offer a favorable borrowing environment, it also signals the RBI’s intent to closely monitor inflation without disrupting growth. We anticipate that this stance will sustain the momentum in the real estate market, encouraging more homebuyers to take advantage of the existing financial conditions.”

Shraddha Kedia-Agarwal, Director, Transcon Developers, “We commend the RBI’s decision to maintain the policy repo rate at 6.5%. The real estate sector has demonstrated resilience amidst fluctuating economic conditions, and the stability in interest rates is a positive sign for both developers and homebuyers. This decision will help maintain the momentum in the housing market, encouraging potential buyers to invest in their dream homes with confidence. We remain optimistic that steady rates will continue to bolster the real estate sector and support overall economic recovery.”

Rohan Khatau, Director, CCI Projects, “The RBI’s decision to maintain the policy rate is a prudent step, as it helps control inflationary trends. The focus on managing inflation to support growth is commendable and will foster a favorable environment for the real estate sector, enabling growth and stability. We are optimistic that these measures will enhance consumer confidence and encourage homeownership, laying a strong foundation for future progress.”

Samyak Jain, Director, Siddha Group, “We welcome the RBI’s decision to maintain the policy repo rate at 6.5%, which reflects a positive approach toward sustaining economic growth while keeping inflationary pressures in check. The real estate sector has seen steady demand, and this RBI move provides continued stability, allowing homebuyers to benefit from favorable interest rates. We hope this stability will encourage more consumers to invest in real estate, driving further growth in the sector.”

Himanshu Jain, VP – Sales, Marketing, and CRM, Satellite Developers Private Limited (SDPL), “We welcome the RBI’s decision to maintain the key policy rate at 6.5%, which aligns with our economic growth policies. The focus on controlling inflation to stimulate growth will undoubtedly spur housing demand, benefiting both homebuyers and developers. We are optimistic that these policies will further enhance market confidence and drive sustained growth in the real estate industry.”

Also Read: Flex Spaces and Sustainability Drive Commercial Property Trends in APAC and India, Colliers Reports

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