The RBI (Reserve Bank of India) has not changed repo rates (which remain at 6.5%) as part of its latest monetary policy review. This has given relief and more confidence to home loan customers and those looking to apply for loans in the coming days.
Real estate industry experts feel that unchanged repo rates will help housing sales figures sustain their current momentum, which has been hugely positive throughout 2023. Reports estimate 1.14 lakh units in housing sales throughout India’s top 7 cities for Q1 2023. Rates of interest across banks are expected to remain in the single-digit territory while they usually range between 8.7-9.65% at leading financial institutions. The outlook stays favourable and positive for those thinking of purchasing their first homes with home loans.
Many experts also feel that residential realty will see steady demand throughout multiple categories with unchanged rates and home loan EMIs. Developers who have debts will also gain with the monetary policy balancing growth and inflation. Yet, they advise caution since normalization of policies globally should require a few quarters at least.
First-time buyers will be in a better position to take home purchase decisions in a more stable regime of lending rates. Those sitting on the fence in the mid-range and affordable categories will have more visibility into their expected EMIs and this will have a positive effect on transactions and sales volumes. The Co-Founder and CFO at Square Yards, Piyush Bothra, states that the decision of the Reserve Bank of India to keep the rates unchanged for the second time is a welcome development and in sync with the expectations of the industry. He also feels that this is an affirmation of the expectations that rates of interest will only go downwards in the future.
He feels that this will be a huge positive for buyers, since they will know that their EMIs will only come down in future years. Several fence sitters should enter the market, while developers could leverage this pent-up demand according to him. He also believes that the industry is at the beginning of a multi-year real estate bull market which will be driven by higher affordability and disposable incomes, along with low or moderate rates of interest.
However, future hikes in rates will take lending rates into double digits, which is a scenario that the real estate industry will be hoping to avoid. At the moment, the stability in lending rates should help the sector maintain its growth momentum over the next few months and beyond.
For a detailed report on this read the articles we were featured in:
The Financial Express: https://bit.ly/3WZ3PYo
The Economic Times: https://bit.ly/3MZbNfA
Business Standard: https://bit.ly/42xUEzd
The Hindu: https://bit.ly/45Tgpwq
Dailyhunt: https://bit.ly/3oWGlGM
CNBC-TV18: https://bit.ly/3X0ShDR
Devdiscourse: https://bit.ly/3NmDOiw
BizNews Connect: https://bit.ly/3qCKGQ5
Business News This Week: https://bit.ly/45WA1j1
Published Date: June 8, 2023
