Repo pause may support housing market growth in festive season

economictimes.indiatimes.com:

RBI's) decision to hold the repo rate for the third time in a row at 6.5% is expected to support the housing property market maintain its pace of steady growth in sales in the upcoming festive season. While interest rate-sensitive segments of affordable and low-income housing have started witnessing some impact of the rate hikes implemented earlier, any further increase may have resulted in hitting the demand in this segment. The central bank, through six successive increases since May 2022, had raised policy rates by a cumulative 250 basis points, taking the repo rate to 6.5% before hitting the pause in April.

«The RBI's pause in rate hikes over the past few quarters will certainly pedal up the real estate growth pace. The upcoming festive tailwinds will garner demand traction in both the ownership and built-to-rent housing segments due to bolstered domestic consumption and NRI demand,» said Niranjan Hiranandani, national vice chairman, NAREDCO. Realty developers cheered the central bank's accommodative stance with recurrent pause in repo rate hike as record high inflation eases off gradually.

However, they also suggested a rate cut would help in demand creation further. «RBI's stance of maintaining the repo rate at 6.5% is a cautious step towards further controlling inflation in the long run. With the economy on track and driven by sustained demand across sectors, we at CREDAI reiterate our view that it will be beneficial for consumer sentiment if a repo rate cut is announced in the next policy review,» said Boman Irani, president, CREDAI National.