The Reserve Bank of India (RBI) has maintained the repo rates at 6.5 per cent for the sixth consecutive time. The repo rate signifies the interest rate at which the RBI provides loans to other banks. While home loan borrowers were hoping for a rate cut that would have reduced their EMIs, the RBI decided to maintain the status quo. Experts believe that a stable repo rate will keep the residential momentum going.
Anuj Puri, Chairman – ANAROCK Group, said, “With the fundamentals of the Indian economy remaining strong despite all global headwinds and inflation well under control, the RBI once again decided to keep the repo rates unchanged at 6.5%, thus extending the festive bonanza that it gave to the homebuyers in its last two policy announcements. Thus, homebuyers retain their advantage of relatively affordable home loan interest rates. If we consider the present trends, the housing market has been unstoppable, and unchanged home loan rates will help maintain the overall positive consumer sentiments. Given that housing prices have risen across the top 7 cities in the last year, this breather by the RBI is a distinct advantage to homebuyers.”
Puri further said, “Going forward, we can expect the momentum in housing sales to continue, significantly aided by the unchanged repo rates which will keep home loan interest rates attractive and also signal ongoing robustness of India’s positive economic outlook.”
Vimal Nadar, Senior Director, of Research at Colliers India, said, “The stability not only provides continued relief to homebuyers in the form of predictable EMIs but also aids real estate developers in having greater confidence on near-term financing costs. The steadiness in the real estate ecosystem augurs well for healthier balance sheets and should provide further momentum to sales in the residential segment. Anticipation of future repo rate cuts and projected GDP growth rate of 7% for fiscal 2024-25 adds credence to the conviction of a strong performance by the real estate sector in the next few quarters.”
NAREDCO’s National President, G. Hari Babu, said that RBI’s decision instils confidence in the country’s economic foundation and growth trajectory. “With an estimated GDP growth of 7% in FY24, there is an optimistic outlook for the year ahead. The unchanged repo rate will stimulate demand in the real estate sector, benefiting both residential and commercial segments. Despite this stability, it’s noteworthy that the current interest rate is at its highest level in the last four years. Therefore, we urge that this factor be taken into consideration in the upcoming review meeting. Such efforts will support the promotion of ‘Affordable Housing’ and the government’s crucial initiative of ‘Housing for All’.”
Prasoon Chauhan, founder and CEO of JustHomz, said that the stability in the repo rate, along with consistent sales in mid-income and premium segments, benefits homebuyers and encourages developers to embark on new projects.
As per ANAROCK Research, 2023 saw average housing prices rise by anywhere between 10-24% in the top 7 cities, with Hyderabad recording the highest 24% jump. The average prices in these markets stood at approximately Rs 7,080 per sq. ft., while in 2022 it was approx. Rs 6,150 per sq. ft. – a collective increase of 15%.