Unchanged repo rate to continue to provide elbowroom to homebuyers: Experts

As broadly anticipated, the Reserve Bank of India in its first financial coverage meeting for FY 2022-23 stored the repo rate unchanged at 4% for the eleventh time in a row. The transfer, trade specialists stated, will vastly assist the economic system recuperate to the pre-Covid-19 ranges at a time when the economic system is steadily gaining floor.

Anuj Puri, Chairman, ANAROCK Group, stated, “Despite inflation edging higher in the aftermath of the Russia-Ukraine war and surging oil prices, the RBI has again decided to keep the repo rate unchanged at 4%. This is the eleventh consecutive time that the RBI maintained status quo amid the current uncertainties and the global economy also seeing a sharp rise in inflation.”

The actual property trade in reality had been gearing up for a rise within the repo charges, and the truth that this has not occurred is clearly constructive for dwelling mortgage debtors. “Developers’ input costs have been inflating steeply and a hike in property prices is not more or less inevitable. Moreover, the acquisition cost in Maharashtra has gone up by 1% on account of the metro cess applicable from this month. To this sombre backdrop, increased home loan lending rates would have been a considerable setback,” Puri added.

Thankfully, homebuyers have a continued alternative to avail of decadal low dwelling mortgage rates of interest. The total price of residing has elevated considerably because the Ukraine debacle started enjoying out, and the RBI has taken a proactive and vital step to preserve relative housing affordability within the nation.

“The geopolitical scenario at the global front and other challenges have led the RBI to lower its growth forecast to 7.2% from 7.8% for FY2022-23. However, the Indian economy appears to be well placed to withstand the shock supported by its forex reserves and stable financial sector. From a real estate perspective, the unchanged repo rate will continue to provide elbowroom to homebuyers, since home loan rates are at a record low. The housing sector saw a revival in 2021 and the continued low home loan rates can further propel homebuyers’ sentiments. The RBI hiked its reverse repo rate, which was expected due to inflationary tendencies seen in the economy,” stated Ramesh Nair, CEO, India and Managing Director, Market Development, Asia, Colliers.

Industry specialists are of the view that the established order on the repo rate will assist preserve the present demand ranges and now have a constructive progress affect on a number of ancillary industries.

Welcoming the RBI transfer, Shishir Baijal, Chairman & Managing Director at Knight Frank India, stated, “Despite the disruptions from geo-political challenges as well as inflationary pressures, the RBI recognises the need to maintain economic growth momentum. We welcome the RBI’s continued accommodative stance and status quo on REPO rate. For the real estate sector, low interest rates for a long period of time have served as a key catalyst for the resurgence of demand. The status quo on repo rates will help maintain the current demand levels as interest rate for both homebuyers and developers are likely to be maintained by financial institutions.”

Amit Goyal, CEO, India Sotheby’s International Realty, stated, “We appreciate RBI’s stance to defend the growth momentum of the Indian economy and keep key rates unchanged. This is significant for the housing sector, which has just about regained its sales velocity. The industry is already feeling the heat of rising input prices with inflationary pressures. Keeping home loan rates benign is of utmost importance to give a long leg to the sector’s recovery, which in turn will have a positive growth impact on several ancillary industries.”

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