Mumbai News: Unchanged Interest Rate A Relief For Homebuyers & Realty Sector

Mumbai: The Reserve Bank of India’s (RBI) Monetary Policy Committee’s decision to keep the repo rate unchanged at 6.50% is a breather for the homebuyers and real estate industry alike as it would mean homes possibly being still within sight.

Relief for Homebuyers

After Governor Shaktikanta Das’ announcement on Thursday morning, Dr Niranjan Hiranandani, National Vice Chairman, National Real Estate Development Council (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, a respite in home loan interest rate will augur well to fuel an uptick in housing sales across the segments.”

“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 repo rates throughout 2023. 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,” reacted Dharmendra Raichura, Vice President (Finance) at Ashar Group.

Some expect cutting of Repo rate

While the developers have welcomed the decision, there are some who now expect the RBI to cut the repo rate, going forward. One such opinion came in from Ramani Sastri, - Chairman & Managing Director, Sterling Developers, who said, “While the rising interest rates in the recent past have certainly impacted the sales of rate-sensitive segments of affordable and mid segment housing, but it did not have any impact on the luxury housing… a reduction in the key rates going forward would be widely celebrated as low interest rates have been a crucial factor in the revival of overall real estate demand and improvement in the liquidity situation which is vital for the sector.”