RBI ups repo rate by 50 bps for 3rd time in
a row, slashes growth forecast to 7.2%
The RBI Governor ended his Monetary Policy Committee Update on September 30, 2022, with a quote from Mahatma Gandhi that reflected the need for optimism and confidence in the face of adversity. In my view, this quote pretty much summed up the RBI approach going forward. The RBI monetary policy hiked repo interest rate by 50 basis points with a 5:1 majority in the MPC primarily due to persistent inflation.
The apex bank also slashed the growth projection to 7% for FY’23 from the earlier forecast of 7.2% due to aggressive tightening of monetary policies globally and moderation in demand.
Following are the reactions from some realty bigwigs:
Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE
“Given the inflationary pressure, the RBI’s decision to increase the repo rate for the fourth consecutive time by 50 basis points to 5.9 % came as no surprise as the move is aimed at protecting forex. Considering the global headwinds facing the economy, we believe that the decision is a calibrated step towards balancing the inflation – growth dynamic.”
Anurag Mathur, CEO, Savills India
“The RBI has been cognizant of global headwinds including heightened inflation and revised FY 23 GDP growth rate downwards by 20 bps to 7.0%. Although inflation projection for the current fiscal year has been retained at 6.7%, it remains beyond the tolerance zone.
On the brighter side for real estate sector, office markets have signalled the beginning of a growth stage. 2022 is likely to witness 55-60 mn sq.ft. of leasing activity in the country. The warehousing and logistics sector stands to benefit from the recently launched National Logistics Policy, which aims to streamline shipping, and lower logistics costs throughout the country. Meanwhile, REITs in the country have received a further boost, with SEBI allowing them to raise funds through short-term commercial papers.”
Avneesh Sood, Director of Eros Group
Today’s decision to hike the repo rate by 50 bps from the RBI governor has reaffirmed the idea that India is a resilient country. His positive analysis of India’s growth projection for FY 23 (7% GDP growth with 6.7% inflation) is a welcome relief. We’re hopeful that as the economy continues to recover and household incomes start to grow, it will provide a buffer for sustaining consumer demand despite the recent interest rate hike.
Harjeet Singh Arora, Managing Director, Best Group
“The impact of global disruptions, the Russia-Ukraine war and the pandemic are now visible worldwide. Almost every nation is going through an economic slowdown and at this stage, it is good that the RBI is taking proactive measures to curb inflation and sustain economic growth. The real estate market will see an impact and prices can see a hike. However, we are confident that these short disruptions will not impact the overall positive sentiments of real estate investors who will continue to invest for long-term, high returns”
Yashank Wason, Managing Director, Royal Green Realty
“The Central Bank’s decision to increase repo rates is aligned to the efforts to curb inflation and keep the economic growth on the right path. The world is currently going through tough times and the government needs to take every possible step that contributes to economic resilience and growth. With loans getting costlier, the real estate market may witness a hike in property rates and may impact the homebuyers but it will be short-term “
M Murali, CMD, Shriram Properties Ltd.
“With the 50 bps hike announced by the RBI today, it is a necessary step as inflation continues to increase. We do not expect this to impact the real estate sales and we believe that the positive sentiment will continue, considering the current robust demand primarily driven by the government’s thrust on affordable housing and the PM’s dream of housing for all”
Anup Agarwal, CFO AIPL
“The all India CPI stood at 6.94% in August 2022 compared to 6.60% in July 2022 and 3.90% during the corresponding month of the previous year. With inflation remaining high, RBI had little option but to raise rates. But high inflation is primarily due to supply constraints, and it would help if authorities look at addressing supply bottlenecks. We expect a robust demand for both residential as well as commercial properties over the next six months or so, and the ongoing festive season is expected to be one of the best in the last few years”
V Swaminathan, Executive Chairman, Andromeda loans and Apnapaisa.com
In a scenario such as this, the cost of borrowing will increase, therefore pushing banks and other financial institutions to increase their lending rates, making EMIs costlier than before. With the rate hike, home loan rates will increase. People opting for home loans should be very cautious and calculative in times such as these. With the increase in the repo rate, borrowers would be well advised to prepay a part of their loan outstanding with surplus funds or increase their EMIs so as to cushion the overall interest outflow.
Pradeep Aggarwal, Founder and Chairman, Signature Global
Increase of repo rate to 50 BPS by apex bank seems an accommodative move as per current micro and macroeconomic conditions globally as well as domestic markets. Inflation is about 7% and the government and apex bank would be taking corrective measures to curb the inflation. However, considering the ongoing festive season combined with high market sentiments affordable and mid-segment housing is going to witness a huge spike in demand. We are highly bullish that sales data would increase approx 20 to 30 % in this quarter and YOY basis also.
Saransh Trehan, Managing Director, Trehan Group
This is the fourth consecutive rate hike by the apex bank in the last five months. However, the demand in the housing market continues to remain robust despite subsequent rate hikes, in fact in many cities it is improving. So, we don’t see any major impact in the scenario even after today’s RBI decision. However, with home rates hovering between 8-9%, further tightening, if any, will start to impact the sectoring and thereby the overall economy.
Dhruv Agarwala, Group CEO, Housing.com, PropTiger.com & Makaan.com
The 50-basis point hike in repo rate to 5.9% was expected as the RBI intensifies its efforts to tame inflation. While banks will eventually be forced to pass on this increased cost to borrowers, the possibility of this happening during the ongoing festive season is low. Considering that a large number of home buyers in India make their purchase decision during this time of the year, financial institutions would not like to dampen the festive spirit by effectuating a rate hike immediately. Even when they do so, the robust buyer sentiment along with renewed investors’ interest in the residential real estate market is likely to continue to support the demand for homes in India.
EV manufacturing to drive demand for 13 mn. sq. ft. of real estate by 2030
National – June 01, 2023 – CBRE South Asia Pvt. Ltd., on Thursday announced the findings of its report, ‘Electric...
Peninsula Land reports 101 Cr FY 23 profit
Mumbai, May 31, 2023: Peninsula Land Limited, has announced results for the Quarter and year ended 31st March, 2023. For...
Shubhashish Homes completes Phase 2 handover of Shubhashish Geeta Property
New Delhi, 31 May 2023: Rajasthan based real estate developer, Shubhashish Homes, announced the successful completion of the Phase 2...
Automovill opens 10K sq ft workshop in Kolkata
New Delhi, May 30, 2023: Automovill, a Bengaluru-based Full-Stack Mobility solution provider, has announced the opening of its latest workshop in...
AltF Coworking to launch 2 properties in NCR
New Delhi, May 2023: AltF Coworking, a co-working solutions provider, has announced the launch of two new properties in Noida...
Agrocorp forays into residential plotted developments with ALPL One
Bangalore May 29, 2023: Real Estate Development Company, Agrocorp, on Monday announced that it is prepared to introduce resort-style villas,...
Guest Column4 weeks ago
Commercial RE: Evolving trends & insights
New Launches4 weeks ago
BPTP launches residential project, District 4 in Sector 84, Faridabad
New Launches4 weeks ago
91Springboard launches 1000+ seater Platinum hub in Gurugram
New Launches4 weeks ago
BST Developers launches “BST-Green Bhoomi”
News3 weeks ago
Tribeca appoints new Head of Business Development, Somendra Sarwal
New Launches3 weeks ago
SAYA launches SAYA STATUS, India’s Tallest Mall
News4 weeks ago
Ganga Realty to invest Rs 400 cr in its maiden high-street retail project in Sohna
Guest Column3 weeks ago
Rising disposable income to push premium housing, commercial segments