Repo rate status quo a big relief for homebuyers
The RBI's decision to keep the repo rates unchanged came as a relief to affordable and mid segment homebuyers who feared a possible rate hike
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New Delhi: The RBI's decision to keep the repo rates unchanged on Thursday came as a relief to affordable and mid segment homebuyers who feared a possible rate hike. Real Estate consultant Anarock termed the unchanged Repo Rates as a boon for the Housing sector.
Anuj Puri, Chairman, Anarock Group said that much against general expectations, the RBI decided to keep the repo rates unchanged at 6.5 per cent. "This is indeed good for the residential real estate market, which faces a tough road ahead amid massive layoffs by large corporates the world over. India is not decoupled from global economic dynamics and their invariable impact on the housing uptake here. The RBI's decision to keep the repo rates unchanged comes as a welcome respite to homebuyers," he added.
This particularly gives relief to affordable and mid segment homebuyers who feared a possible rate hike, making property buying via home loans even harder. As is, affordable housing has been under stress since the pandemic.
Anarock Research indicates that in 2019, out of the total sales of nearly 2,61,400 units across the top seven cities nearly 38 per cent sales were in the affordable segment. But in 2022, out of the total 3,64,880 units sold across the top seven cities altogether, about 26 per cent were in the affordable category. There has been a further dip in overall sales share in Q1 2023, as well. Out of total 1.14 lakh units sold in the top seven cities in Q1 2023, affordable housing comprised just 20 per cent share (or. approx. 23,110 units sold).
Niranjan Hiranandani, Vice Chairman, Naredco National said that this act of relief will restore confidence in homebuyers' sentiment and boost demand rally in the real estate. "The industry body now calls for fiscal intervention from the Government of India to cool the inflationary heat caused by persistent geopolitical turbulence caused by the collapse of foreign banks, supply chain challenges, and global financial instability. Additionally, devising innovative flexi or step-up EMI schemes by the banks and FIIS will be conducive for the market players to onboard new home buyers in the high interest rate regime," he added.
Pradeep Aggarwal, Chairman, Signature Global said that the RBI's choice to leave policy rates unchanged is a significant relief for prospective homebuyers, as well as for supply-side stakeholders.
"The past three quarters have seen a gradual rise in home loan interest rates, causing a significant impact on borrowers as rates have surged to over 9 per cent, marking a 40-50 per cent increase from their historical low. Any additional policy rate hike could push home loan interest rates even closer to the psychological threshold of 10 per cent per annum, creating a substantial impact on buyer sentiments and affordability," he added.
