Real estate to benefit more if rates are reduced: Developers

financialexpress.com:

Real estate consultants and developers welcomed the RBI MPC decision on Friday to keep the repo rate unchaged for the fourth consecutive time, which was much needed albeit the looming inflationary pressure arising from the rising crude prices and rupee depreciation.

“By pausing the policy rate, the central bank continues to maintain its focus on economic growth, which is facing headwinds primarily from the external factors, such as slowdown in global growth, high energy prices and geopolitical tensions; and remains cautious of inflationary pressure as well,” said Shishir Baijal, Chairman & Managing Director, Knight Frank India.

Measures to reduce excess liquidity and improve transmission of earlier policy rate hike measures align with price stability goals of the central bank. The decision will continue to maintain the existing momentum of residential real estate demand in India.

“Since the interest rate upcycle, the repo rate has been hiked by 250 bps, resulting in a 160 bps rise in home loan rates. Since then, although the overall housing demand has remained upbeat, the lower housing segment or the affordable housing demand has witnessed a deceleration due to a substantial rise in the borrowing costs and other challenges. The stance today should be considered as a big relief for the housing sector of the country which has shown tremendous strength in the face of headwinds over the last year,” Baijal added.

Also Read: RBI keeps repo rate unchanged at 6.5% – What it means for homebuyers?

NAREDCO’s National Vice Chairman Niranjan Hiranandani also applauded the balanced mechanism implemented by the RBI Governor while withdrawing accommodation.

“Keeping the repo rate at 6.5% reflects the importance of anchoring inflation