Stable RBI Stance Boosts Real Estate Sector and Homebuyers
The RBI's decision to keep the repo rate unchanged at 6.5% for the ninth consecutive time has been welcomed by property developers, who believe it will create a stable environment for the real estate sector.
Real EstateRbiRepo RateHomebuyersDevelopersReal Estate MumbaiAug 08, 2024
Property developers said the RBI decision to keep the repo rate unchanged is a stabilizing force in the current volatile global economic scenario. With the US recession threats hovering, the Bangladesh crisis impacting regional capital flows, and broader global economic uncertainties, steady home loan interest rates offer a semblance of predictability.
However, stakeholders must closely monitor these geopolitical undercurrents and macroeconomic indicators to adapt their strategies effectively, said Dr Niranjan Hiranandani, Chairman, NAREDCO.
From a real estate standpoint, lowering the repo rate could have helped revive affordable housing, which has been negatively affected by higher interest rates. However, NRI investors, particularly, find this predictability crucial amidst fluctuating foreign exchange rates and global undercurrents. As the market remains steady, it provides fertile ground for both long-term and short-term real estate investments, but vigilance towards inflation trends, fiscal policies, and global economic developments remains imperative, Dr Hiranandani added.
This stability allows developers to plan projects confidently, knowing that financing conditions will remain favorable. The RBI's balanced approach to economic management helps maintain market confidence, reassuring investors amidst global economic uncertainties. This period of steady rates can be leveraged by the sector to drive growth, innovation, and increased transactions, making the festive season an ideal time to capitalize on market opportunities and support economic expansion, said G Hari Babu, National President of NAREDCO.
The following are the insights provided by prominent developers in India regarding the announcement made by the RBI's Monetary Policy Committee on Thursday
Aditya Kushwaha, CEO and Director, Axis Ecorp, said, The RBI decision to maintain the repo rate at 6.5% for the ninth consecutive time signifies a cautious approach amidst solid economic growth and easing inflation. For the real estate sector, this stability in policy rates can bolster investor confidence and encourage homebuyers, leading to sustained demand.
Mohit Goel, Managing Director, Omaxe Group, said, By keeping the repo rate unchanged at 6.5% for the ninth consecutive time, the RBI has once again demonstrated its commitment to economic stability and growth. This decision is helpful for the real estate sector, creating an environment of certainty and confidence among homebuyers and investors.
Avneesh Sood, Director, Eros Group, said, By keeping the rate unchanged, the RBI underscores its commitment to managing price stability while supporting robust growth. This steady stance is particularly beneficial for the real estate sector, as it ensures that borrowing costs remain stable for both developers and homebuyers.
Navdeep Sardana, Founder & Chairman, Whiteland Corporation, said, We welcome the RBI announcement to keep the repo rate unchanged. With inflationary pressures well regulated by the RBI in the last quarter, this announcement further ensures that the central bank is committed towards maintaining an expansionary policy that is primed for national growth.
Aman Trehan, Executive Director, Trehan Iris, said, The RBI decision to maintain the repo rate at 6.5% for the ninth consecutive time is a commendable move that balances inflation control with economic growth. We as real estate developers are encouraged by this move as it supports affordable homeownership and enhances market confidence.
Harinder Singh Hora, Founder Chairman, Reach Group, said, We commend the RBI's decision to maintain the repo rate. This strategic move is anticipated to positively impact commercial real estate growth by ensuring stable loan interest rates.
Rajjath Goel, Managing Director, MRG Group, said, The authorities have reinforced the sign of stability by keeping the repo rate constant for the ninth time. With the GDP growth projection steady at 7.2%, this stability of 6.5% in the repo rate will strengthen the buyers' incline towards the sector.
Amit Modi, Director, County Group, said, The move by RBI to keep the repo rate unchanged was the need of the hour and we hope it remains the same in near future as well. Looking at the macro economic situation of the country in regards to the middle class, this move was of vital importance for first time home buyers planning to invest in real estate as an asset class.
Frequently Asked Questions
What is the current repo rate in India?
The current repo rate in India is 6.5%.
How does the RBI's decision to keep the repo rate unchanged affect the real estate sector?
The RBI's decision to keep the repo rate unchanged creates a stable environment for the real estate sector, which is expected to boost demand in the housing market, especially during the upcoming festive season.
What is the impact of the RBI's decision on homebuyers?
The RBI's decision to keep the repo rate unchanged makes home loans more affordable, which is likely to boost demand in the housing market.
How does the RBI's decision affect developers?
The RBI's decision to keep the repo rate unchanged allows developers to plan projects confidently, knowing that financing conditions will remain favorable.
What is the outlook for the real estate sector in India?
The real estate sector in India is expected to grow, driven by stable interest rates, government initiatives, and increasing demand for housing.
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