Mumbai Real Estate Sector Applauds RBI's 6.5% Repo Rate, Eyes Festive Sales Boost
Prashant Sharma, President of NAREDCO Maharashtra, believes the RBI's decision to maintain the repo rate at 6.5% is crucial for the real estate sector, signaling stability in the interest rate environment and supporting housing demand during the festive s
Real EstateRbiRepo RateHome LoansFestive SeasonReal Estate MaharashtraOct 09, 2024
While some developers argue that a 25 basis points cut could have further energized festive sales, they acknowledge that the current approach is a prudent step towards ensuring economic stability. The stability in interest rates can help sustain the ongoing demand for home loans, which is crucial for the real estate sector's growth.
Dr. Niranjan Hiranandani, Chairman of NAREDCO and the Hiranandani Group, expressed his views on the matter. 'Real estate cycles are typically long, and the current positive momentum is expected to continue. With India's projected GDP growth at 7.2%, the demand-supply dynamics are expected to remain healthy. The growing desire for homeownership, increased interest in luxury homes, and rising investments in real estate assets will further boost demand in the sector,' he said.
Prashant Sharma, President of NAREDCO Maharashtra, emphasized the importance of the RBI's decision. 'The maintained policy rate signals a steady interest rate environment, which can help sustain the ongoing demand for home loans. As the sector gears up for the festive season, this decision could further support housing demand and investment momentum,' he added.
Developers believe that the RBI's decision to keep repo rates unchanged while shifting its stance to 'neutral' is a positive move for the real estate sector. This aligns with the global trend, where many central banks have reduced interest rates. The shift in stance indicates that the RBI is prepared to follow a monetary policy that is in sync with global trends.
Kaushal Agarwal, Director and Co-Founder at The Guardians Real Estate Advisory, highlighted the benefits for home loan borrowers. 'This is good news for first-time buyers, as their EMIs will remain constant for now and may decline in the near future. This move allows them to plan better without the concern of rising interest costs,' he said.
Gauri Tandle, CFO at Ashwin Sheth Group, noted that the decision is favorable for mid-range and luxury residential offerings. 'It will bolster consumer confidence by ensuring stability in home loan interest rates. This stability enables buyers to invest in properties without the fear of rising interest rates. For developers, a positive consumer sentiment and the right purchasing power quotient help maintain project launches and enhance investment attractiveness,' she added.
Domnic Romell, President of CREDAI-MCHI, emphasized the significance of the decision for the real estate sector in the Mumbai Metropolitan Region (MMR). 'This decision helps maintain current borrowing costs for both homebuyers and developers, providing consistency and predictability in the market. It ensures that home loan EMIs remain steady, offering relief to first-time buyers and investors in a market where affordability is a constant challenge,' he said.
Hitesh Uppal, Head of Finance at Magicbricks, pointed out that while stable rates create a favorable borrowing environment, they also temper expectations for more affordable financing, which could slow buyer momentum. 'On one hand, stable rates boost market confidence and help control inflation-related cost pressures. On the other hand, it may also temper expectations for more affordable financing, which could impact buyer momentum,' he concluded.
Frequently Asked Questions
What is the current repo rate set by the RBI?
The current repo rate set by the RBI is 6.5%.
Why is the repo rate important for the real estate sector?
The repo rate is crucial for the real estate sector because it influences home loan interest rates, affecting the affordability and demand for homes.
How does a stable repo rate impact home loan EMIs?
A stable repo rate ensures that home loan EMIs remain manageable, which encourages both current and prospective homeowners to invest in properties.
What are the expectations for the festive season in the real estate sector?
The expectations for the festive season are high, with the stable repo rate anticipated to drive increased home sales and investment momentum.
How does the RBI's neutral stance affect the real estate market?
The RBI's neutral stance aligns with global monetary policies and helps maintain consistency and predictability in the market, fostering consumer confidence and investment attractiveness.
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