Unchanged repo rate bodes well for housing sector, say property consultants
The Reserve Bank of India today decided to keep the repo rate unchanged at 6.5%, leading to a rate pause for the eighth consecutive time. This decision bodes well for the housing sector which is already witnessing a strong demand across the country.
This stability ensures that home loan interest rates will remain low, at least in the near future, making housing more affordable for potential buyers. With unchanged borrowing costs, both developers and homebuyers will benefit from increased market confidence and predictability.
“The mid-range and premium property segments together account for more than 55% of the current supply. Together, they recorded approx. 76,555 units sold in Q1 2024 – nearly 60% of the total sales. The buyers of this segment are sensitive to volatile interest rates, and upward hikes would cause many of them to defer home purchases. This policy continuity supports sustained demand in these two segments,” said Anuj Puri, Chairman, ANAROCK Group.
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The affordable housing sector is, of course, most cost sensitive. While PMAY Urban has sanctioned 118.64 lakh homes against a demand of 112.24 lakh homes, affordable housing (homes priced under INR 40 lakh) sales in Q1 2024 recorded 26,545 units – a mere 20% of the total sales.
However, “as we have seen, unchanged home loan rates alone are insufficient to induce new vibrancy in the affordable segment. It is hoped that the government will soon introduce further incentives to support it. With the mandate of a stable government now manifest in an unchanged monetary policy, the housing sector’s overall growth momentum will continue,” added Puri.
Anurag Mathur, CEO, Savills India, said, “The RBI
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