RBI’s unchanged rates spur confidence in realty market

The RBI’s steady stance is anticipated to encourage investment in real estate, as borrowing costs for consumers remain unaffected. This is expected to sustain the momentum in home purchases that has been observed over the past few quarters

Mumbai: The Reserve Bank of India (RBI) has decided to keep its key policy rates unchanged, signaling a period of stability and growth for the real estate sector.

This decision, announced after the latest monetary policy committee meeting, comes as a relief to both developers and homebuyers, who were worried about potential rate hikes amidst economic fluctuations. Industry leaders are optimistic that this move will bolster the housing market and benefit prospective home buyers.

Talking to Bizz Buzz, Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd says, “While there was anticipation that the RBI might decrease policy rates, which could have reduced existing home loan interest rates, however due to ongoing global uncertainty and persistently high inflation, the RBI avoided any rate cuts as of now.”

Nevertheless, as highlighted by the finance minister in the budget speech, and reiterated by the governor following the MPC meeting, the Indian economy is performing robustly, with a projected real GDP growth of around 7 per cent in the next fiscal year. Consequently, the demand for real estate is expected to persistently increase.

Prashant Rao, Managing Director, Poulomi Estates, a Hyderabad-based real estate developer says, “Home buyers now feel relieved and reassured, as the likelihood of further interest rate hikes in the near future diminishes, allowing them to confidently plan their borrowings.”

Moreover, the governor's positive remarks regarding the economy's performance and the decreasing inflation risk indicate a potential policy rate cut in the upcoming MPC meetings. This anticipated move will be advantageous for home buyers in the future.

The real estate market is buoyant, and the current stance of the RBI is expected to bolster the sector's growth.

Pritam Chivukula, Vice President of CREDAI-MCHI and Co-Founder & Director of Tridhaatu Realty, says, “We acknowledge the housing sector's success during the past few quarters and praise the recent government initiatives for boosting the real estate market. The RBI's decision is a positive signal for the real estate sector. It will bolster consumer confidence and encourage investment in property," he said.

The RBI’s steady stance is anticipated to encourage investment in real estate, as borrowing costs for consumers remain unaffected. This is expected to sustain the momentum in home purchases that has been observed over the past few quarters.

Welcoming the RBI's decision, Aakash Patel, Director of Atul Projects India Pvt Ltd. said, “We believe that maintaining the repo rate will help control inflation and maintain liquidity, encouraging prospective home buyers to invest in their dream homes, thereby sustaining the positive trend in home sales.”

It provides a much-needed cushion for the real estate sector, potentially boosting residential as well as commercial property markets.

Samyak Jain, Director of Siddha Group, said, “The real estate market has witnessed a robust perfomance, driven by increasing demand for homeownership and rising income levels. We are optimistic about a surge in demand in the coming months and anticipate this positive trajectory to acontinue in this year as well.”

Homebuyers stand to benefit from this decision as it implies stable loan interest rates. The unchanged policy rates mean that the cost of borrowing will not increase, making it an opportune time for potential homeowners to secure loans at attractive rates.

Himanshu Jain, VP of Sales, Marketing, and CRM at Satellite Developers Private Limited (SDPL), observed a peak in the festive and the post festive season sales and expects the RBI's decision to further motivate potential buyers encouraging them to pursue homeownership.

Rohan Khatau, Director of CCI Projects, says, “This is a win-win for both builders and buyers. For builders, it means more liquidity and lower financing costs. For buyers, it ensures that home loans remain affordable.”

While this move by the RBI is welcomed by the real estate sector, experts advise cautious optimism, keeping an eye on global economic trends and internal fiscal policies. The sector's growth is contingent on a variety of factors, including overall economic stability and consumer sentiment.

The RBI's decision to keep the key policy rates unchanged is a significant development for the real estate sector, fostering an environment conducive to growth and investment. As the sector navigates through the times ahead, the role of policy stability cannot be overstated in driving its success.

Overall, industry leaders are confident that the RBI's decision will continue to foster a conducive environment for homebuyers, sustaining the momentum in the real estate sector.