Real estate sector has hailed the RBI’s move to maintain the repo rate at 6.5% saying that it will not only boost the growth in the sector but improve market sentiments propelling housing demand. However, some realty players want the state governments to step in and reduce stamp duty which will further boost home sales.
Dr Niranjan Hiranandani -National Vice Chairman -NAREDCO stated that, “As a snowball effect, respite in home loan interest rate will augur well to fuel uptick in housing sales across the segments. Now, the discerning homebuyers should avail the benefits of cooling inflation, stable home loan rates, conducive real estate market dynamics in the backdrop of buoyancy in GDP growth, domestic demand and availability of sufficient liquidity. With the festive season in tailwinds, a hiatus in interest rate hike will act as a growth catalyst and boost sales velocity.’’
Notedly, rise in purchasing powers of Indian consumers as they tap into an alternative income avenue through capital markets, hike in salaries, job opportunities, gains in rental income are acting as funding streams for the homebuyers to buy residential assets,’’ noted Hiranandani. ‘’The supply of new housing stock is in tandem to the uptick in housing demand across property markets. Indian homebuyers are highly skewed towards luxury lifestyle as we witness rise in emerging first-gen millionaires, due to startup boost and enhanced business capacity utilization. This phenomenon prompts new homebuyers to take the plunge and secure the ownership of a home on the grounds of social security and stability,’’ he added.
Dhruv Agarwala, Group CEO, Housing.com, PropTiger.com & Makaan.com observed, ‘’In line with industry expectations, the RBI has maintained a status quo on its benchmark lending rate. With this, the repo rate will be maintained at 6.5%. This augurs particularly well for the real estate sector in the country. Amid all growth indicators moving in the right direction, the consumer spirit would get a renewed boost from the RBI move, which means home loan interest rates would remain at the current level.”
According to Pritam Chivukula – Vice President, CREDAI-MCHI and Co-Founder & Director, Tridhaatu Realty, this is the second consecutive pause in repo rate hike which will definitely improve market sentiments, propelling housing demand. ‘’We are seeing a buoyant housing sector where home buyers are coming forward to buy property. This reflects a healthy outlook for the sector and we can expect the government to continue with industry friendly policies that will sustain housing sales. We hope that the State Government steps in to lighten the homebuyer’s load by reducing stamp duty to further boost home buyer sentiments and boost home sales,’’ he opined.
Nitin Bavisi, CFO, Ajmera Realty & Infra India Ltd on RBI MPC announcement argued that ‘’This move will not only bring stability to the real estate sector but also contribute to its overall growth and development. With the repo rate being kept unchanged, it is expected to stimulate investment in the real estate market as borrowing costs remain favourable. This favourable environment is set to provide a significant boost to the real estate sector, fostering confidence among investors and homebuyers alike. Largely, it is expected that the RBI may start easing rates by CY24, expecting pricing power to return for most players in the next 12 months.”
Moreover, Venkatesh Gopalkrishnan, Director Group Promoter’s Office & CEO, Shapoorji Pallonji Real Estate said the unchanged repo rate provides a sense of certainty to developers and homebuyers alike, instilling faith in the real estate market. It is a positive development that will have far-reaching implications for the industry. ‘’While residential demand has showcased resilience, particularly in the luxury and premium segments, this decision by the RBI is poised to further propel the real estate sector. The unchanged repo rate not only encourages investment but also facilitates affordable home loans, making homeownership more accessible to aspiring buyers. We anticipate this to contribute positively to the overall market sentiment,’’ he added.