Realtors push for repo rate cut to RBI to boost housing demand

Mumbai: Realtors' bodies CREDAI and NAREDCO have urged the RBI to reduce the repo rate in the next monetary policy, stating that lower interest rates on home loans could boost demand for residential properties.

The Reserve Bank of India has decided to keep the benchmark interest rates unchanged at 6.5 per cent for the seventh consecutive time.

This decision comes as the RBI expresses concerns over food inflation, particularly with the IMD's prediction of above-normal maximum temperatures during April to June. The next meeting of the MPC is scheduled for June 5 to 7, 2024.

With the RBI maintaining key policy rates, EMIs on home and auto loans are expected to remain stable for the foreseeable future.

CREDAI President Boman Irani noted, "The central bank is maintaining the repo rate at 6.5 per cent as part of a hawkish stance to control inflation. However, we are hopeful to see lower repo/interest rates later this year, which could provide a boost not only to the real estate and housing demand but also to other industries, promoting sectoral and economic growth."

NAREDCO National President G Hari Babu stated that the RBI's decision to maintain the repo rate reflects confidence in the nation's economic fundamentals, setting a positive tone for the new financial year. "While the current interest rate remains at its highest in four years, we urge the RBI to consider our appeal in its forthcoming review meeting," he added.

Real estate consultant Anarock Chairman Anuj Puri commented, "The RBI's decision aligns with expectations. The Indian economy is performing well, with inflation under control, albeit still outside the RBI's target range. This decision to maintain the status quo is expected to sustain the ongoing momentum in residential real estate sales, providing confidence to potential homebuyers."

Housing.com CEO Dhruv Agarwala said, "The RBI's decision to keep the repo rate unchanged for the seventh consecutive time, amidst improving growth numbers and moderating inflation, is positive for the real estate sector. This stability in housing loans and property prices will benefit both buyers and developers."

Property consultant Vestian CEO Shrinivas Rao mentioned, "The stability of repo rates for over a year has brought certainty to the real estate market. However, rate cuts are anticipated in the second half of 2024 if inflation falls within the upper limit of 4 per cent set by the RBI."

Real estate developers welcomed the decision to maintain stability in the interest rate regime but are hopeful for a reduction in the upcoming policy.

Eros Group Director Avneesh Sood stated, "With stable interest rates, homebuyers can proceed with confidence, supporting sustained growth in the housing market."

Ambience Group chief business officer Ankush Kaul added, "The positive trend in the real estate sector is expected to continue, benefiting both borrowers and developers and bringing balance to financial volatility."

Nayan Raheja, Promoter of Raheja Developers, mentioned that the RBI's decision will provide relief to borrowers as their EMIs will not increase.

Mumbai-based Tribeca Developers' CEO Rajat Khandelwal noted, "The continued liquidity and stable lending rates will enable buyers to upgrade to luxury properties within their desired budgets."

Aman Trehan, Executive Director of Trehan Iris, described the decision as a "balanced move" that aims to control inflation while supporting economic growth.

Anurag Goel, Director at Goel Ganga Developments, believes that the lower cost of funds will stimulate demand in the real estate sector.

Shiwang Suraj, Director & Founder of InfraMantra, emphasized that this consistency fosters confidence among investors and homebuyers, providing a stable environment for sustainable growth and prudent decision-making in property investments.

Nitin Bavisi, CFO of Ajmera Realty and Infra Ltd, mentioned that the RBI's decision to keep the repo rate unchanged is seen as a significant influencer for the real estate sector's demand.