Home loan interest is a major factor when it comes to deciding a home purchase. The higher the home loan interest, the lower the chances of one buying a house.
By Varun Singh
The unchanged Repo Rate by the Reserve Bank of India (RBI) has made many a people happy. As this would directly mean that the the home loan interest rates will remain unchanged.
Here’s what the industry experts, developers and builders have to say about the same, and how it has impacted the realty industry.
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Dr. Niranjan Hiranandani, Vice Chairman National – NAREDCO, and MD Hiranandani Group:
The Reserve Bank of India defines a positive roadmap for economic growth with a balanced view. The continuance of accommodative stance on the policy rate is on the back of confidence instilled by RBI in India’s steady GDP growth rate as projected. A status quo is maintained on the key rates as the economy looms over uncertainties due to the new strain of Omicron virus buds in. With the Indian economy reflecting a ‘K-shaped’ recovery, there is an urgent need to uplift reeling sectors like Manufacturing, MSMEs and Services which are crucial for equitable economic growth. Measures that give a boost to job creation are an absolute priority. Stakeholders in the Indian economy look forward to enhanced Government spending in terms of capex for infrastructure growth and the possibilities of a deficit need to be overlooked in favour of spending to spur economic growth. Real estate will benefit from the low home loan interest rates which continue as a result of the RBI MPC’s decision, and home buyers should make the most of historic low home loan interest rates regime.
Anuj Puri, Chairman – ANAROCK Group.
With Omicron throwing a shadow of doubt across the world and in India, the RBI has decided to keep the repo rates unchanged at 4% and reverse repo rate at 3.35%. This was expected, and is the ninth consecutive time that the RBI maintained status quo amid current uncertainties. The unchanged repo rates will help maintain status quo on the prevailing low interest rate regime for some more time. This works well for all home loan borrowers as the environment of affordability will continue.
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Sandeep Runwal – President, NAREDCO Maharashtra and Managing Director, Runwal Group.
“The RBI has always taken a proactive stance to ensure liquidity in the past few months, and has continued it’s accommodative policy stance amid the renewed Covid threat from the Omicron variant. It is imperative that low mortgage rates would continue, at least till the end of the year. This will provide required fuel for the growth of the economy along with the real estate industry to which several other allied sectors are linked with. We at NAREDCO have already urged the State Government to reconsider their decision and reinstate the stamp duty reduction for another year so as to encourage home buyers and invest in their dream homes.”
Ramesh Nair, CEO| India, and Managing Director, Market Development| Asia, Colliers.
On expected lines, RBI has kept repo rates unchanged at 4% for the 9th consecutive time. This accommodative stance will aid demand dynamics and propel economic growth to mitigate the impact of Covid-19. This will support RBI’s vision of GDP growth of 9.5% for the year. At the same time, the growth will also hinge upon the new variant of covid-19 and its impact. The unchanged repo rate will continue to improve sentiments in the real estate sector. The housing sector is already seeing a revival in sales, led by low home loan rates, pent-up demand, and stable prices.
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Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Hon. Secretary, CREDAI MCHI
We welcome the RBI’s decision to continue with their accommodative stance keeping in mind the economic uncertainty due to the new COVID-19 variant Omicron. The low interest rates have been a crucial factor in the revival of the demand in the real estate sector. The sector saw a good festive season on the back of rock-bottom interest rates on home loans along with festive offers from good developers. The buyers are already coming back to the market and we feel that this might be the last opportunity for the homebuyers to purchase property with low interest rates before RBI decides to hike it in their next policy announcement. 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.
Manju Yagnik, VCP, Nahar Group and Sr. Vice President, Naredco, Maharashtra. With the RBI keeping the repo rate unchanged for the 9th consecutive time, homebuyers can still continue to enjoy the low-interest rates on their housing EMIs. The Apex Bank’s continuous status quo is yet another opportunity for all those first-time buyers and fence sitters eyeing for a home considering safety and security with the ongoing pandemic. RBIs decision to keep Repo Rate unchanged since the onset of pandemic and now with Omicron threat looming large is aimed to aid homebuyers with lowest interest rate regime and maintain adequate liquidity. The increased affordability due to unchanged Repo Rate, developer offers and schemes, festival benefits has worked in the favour of developers with the sector recording growth of 15 – 20% over the last few quarters. The new variant as well as the continued lowest interest rates are the two main triggers which will drive the sales for next few quarters due to increased interest of home buyers to own a dream home.
Kaushal Agarwal – Chairman, The Guardians Real Estate Advisory
The RBI and the MPC’s decision to maintain an accommodative stance amid global scare due to new coronavirus variant Omicron was very much expected. Their approach towards tackling the situation created by the pandemic and steps taken to help revive the economy will go down in history as being one of the finest. The various policy reforms along with the all-time low housing loan rates have given the much-required fillip to sales activity in the last few quarters. The all-time low rates regime has boosted the housing demand and helped the economy to get back to the pre-COVID levels.
Suren Goel, Partner, RPS Group
RBI decision to maintain status quo on the interest rate means home loan rates will continue to remain at a record low level. This augurs well for the housing sector and the real estate sector as a whole. With reasonable prices, lower interest rates and sufficient option to choose from, this is perhaps the best time to buy a dream home and we are hopeful of witnessing an uptick in demand.
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