Good news, homebuyers can now avail low interest rates

The Union Budget may have disappointed those who were seeking relief under income tax slabs, but the latest decision by the Reserve Bank of India (RBI) has surely brought smiles to potential homebuyers in the country.

As the Monetary Policy Committee (MPC) of the RBI decide to keep the repo and reverse repo rates unchanged, the country's real estate developers are now anticipating further surge in demand for residential homes.

After the three day long bi-monthly MPC meeting, the committee has kept the repo and reverse repo rates unchanged at 4 per cent and 3.35 per cent, respectively. What this essentially means for loan seekers is that the banks and other financial lenders are likely to keep loan interest rates intact. This, according to industry experts, will be more beneficial for housing industry as homebuyers would be benefitted from a lower home loan interest regime.

Currently, the interest rates offered by most leading banks and non-banking financial institutions is ranging between 6.4-6.9 per cent -- lowest in years. And today's decision is likely to keep the rates intact -- encouraging more number of fence sitters to take the plunge.

Welcoming the RBI's decision, Anuj Puri, Chairman, ANAROCK Group, however, cautioned that the lower rates may not continue for long, implying that people willing to purchase a home should not wait. "While the window of opportunity for homebuyers to avail low interest rates has been extended for some more time, it is unlikely to prevail for much longer - sooner or later, repo rates will rise."

According to Ramesh Nair, CEO, India & Managing Director, Market Development, Asia at Colliers, this decision comes as a breather for the real estate sector. "In the absence of the specific demand-side interventions from the Budget 2022-23, prospective homebuyers can continue to benefit from lower home loan interest rates which are here to stay for now."