Major stakeholders and top developers have appreciated the RBI’s decision to keep key policy rates unchanged. They are hopeful that the low interest regime will benefit home loan borrowers leading to spurt in demand. Herewith, we reproduce the feedback of the realty sector to the RBI decision:
Dr. Niranjan Hiranandani, Vice Chairman National – NAREDCO, and MD Hiranandani Group, said “The Reserve Bank of India defines a positive roadmap for economic growth with a balanced view. The continuance of accommodative stance on the policy rate is on the back of confidence instilled by RBI in India’s steady GDP growth rate as projected. A status quo is maintained on the key rates as the economy looms over uncertainties due to the new strain of Omicron virus buds in. Real estate will benefit from the low home loan interest rates which continue as a result of the RBI MPC’s decision, and home buyers should make the most of historic low home loan interest rates regime,”
Ramesh Nair, CEO| India, and Managing Director, Market Development| Asia, Colliers, said, “On expected lines, RBI has kept repo rates unchanged at 4% for the 9th consecutive time. This accommodative stance will aid demand dynamics and propel economic growth to mitigate the impact of Covid-19. This will support RBI’s vision of GDP growth of 9.5% for the year. At the same time, the growth will also hinge upon the new variant of covid-19 and its impact. The unchanged repo rate will continue to improve sentiments in the real estate sector. The housing sector is already seeing a revival in sales, led by low home loan rates, pent-up demand, and stable prices”.
Anuj Puri, Chairman – ANAROCK Group, said, “With Omicron throwing a shadow of doubt across the world and in India, the RBI has decided to keep the repo rates unchanged at 4% and reverse repo rate at 3.35%. This was expected, and is the ninth consecutive time that the RBI maintained status quo amid current uncertainties. The unchanged repo rates will help maintain status quo on the prevailing low interest rate regime for some more time. This works well for all home loan borrowers as the environment of affordability will continue”.
Anshuman Magazine, Chairman & CEO, India, South-East Asia, Middle East & Africa, CBRE said, “The RBI’s decision to maintain the repo and reverse repo rates steady at 4% and 3.35% has come at a time where economies across the globe prepare to deal with the uncertainties owing to COVID-19’s Omicron variant.
While keeping an eye on inflation levels, the RBI’s focus remains on ensuring durable and self-sustaining economic growth, thereby underscoring the importance of policy support. Also, on the back of positive domestic indicators such as improving consumer demand, revival in investment activity and range bound inflation, the central bank retained its previous projections of GDP growth at 9.5% in FY 2021-22, despite certain downside risks. Hence, we are optimistic that this steady stance would augur well for home loan borrowers and India’s real estate market.”
Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and Proptiger.com
The decision of the RBI MPC to keep key policy rates unchanged is along expected lines. The ongoing growth-inflation trade off also requires the banking regulator to tread a careful path. Even though economic indicators are reflecting a positive trend, interest rates needed to be kept at the current level in order to continue to drive growth and boost demand in the real estate sector, a key contributor to economic growth in India. If home sales have shown consistent improvement over the past couple of quarters, much of this can be attributed to the record low interest rate regime. Upsetting the current momentum would have been highly detrimental to the overall economic recovery.
Pradeep Aggarwal, Founder & Chairman, Signature Global Group, Chairman, ASSOCHAM, National Council on Real Estate, Housing and Urban Development, said, “The low home loan interest rate has been a crucial demand by real estate, and the RBI has helped the sector by maintaining the status quo. We would suggest that the buyers take advantage of the current situation because later prices might go upwards under the pressure of increased costs.”
Amit Goyal, CEO, India Sotheby’s International Realty, said, “We welcome RBI’s status quo on policy rates. This means that the home loan interest rate will remain at the current level of sub 7% per annum. Besides that, the Governor rightly said in his statement that recent reduction in excise duty and state VAT on petrol and diesel will support consumption demand by increasing purchasing power. We expect demand in the housing market to improve further. All eyes are now on the upcoming budget. It will boost the real estate sector if the government enhances deductions against home loans in Budget 2022”.
“We have to understand that real estate does not work alone but depends on the growth of all other sectors/industries. The accommodative stance that RBI has taken will boost the economic environment and lead to a conducive situation for the real estate sector too. Looking at the increased demand for real estate, we urge the state governments to reduce stamp duty to be a gift to the homebuyers,” said Nayan Raheja of Raheja Developers.
LN Jha, Director, SKA Group, said, “As the inflation is pegged at 5% (within the safe zone of 2-6%), RBI’s decision to keep the repo rate unchanged at 4% was very much on the expected lines. Simultaneously, the sustenance of accommodative stance also bodes well for the emergence of a strong economy, out of the sustained revival path. With new variant being found, these are crucial times which require high degree of monetary and fiscal support and RBI is dealing rightly with it. This decision will have a long-lasting impact in ensuring consistent growth to the entire real estate sector and its ancillaries.”
Uddhav Poddar, MD, Bhumika Group, said, “While the MPC expectedly maintained status quo on the policy rates, we would have hoped for a reduction in rates to uplift the sentiment, especially when customers have started regaining their faith back and have began treading towards making high-end purchases. Lower EMIs play a critical role in order to rekindle demand, and make real estate assets more appealing. RBI has also enhanced the transaction limit to Rs 5 lakh from Rs 2 lakh for UPI payments for RBI’s Retail Direct scheme, which will be giving a significant boost to the particular segment.”
Suren Goel, Partner, RPS Group, said “RBI decision to maintain status quo on the interest rate means home loan rates will continue to remain at a record low level. This augurs well for the housing sector and the real estate sector as a whole. With reasonable prices, lower interest rates and sufficient option to choose from, this is perhaps the best time to buy a dream home and we are hopeful of witnessing an uptick in demand”.
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