NEW DELHI: Costlier home loans and the fear of RBI hiking interest rate are proving to be spoilers for the realty sector, which is eagerly waiting for the festive season to revive sales. The silver lining is the depreciating Indian rupee, as many NRIs are mulling to invest in residential properties. “There is certainly a surge in queries from the home buyers compared to the last festive season.
But, it is not translating in sales. Home buyers are waiting for some festive discount in loans,” a sales executive from 99acres.com in Delhi NCR told TNIE. Industry experts claim if the RBI increases interest rate in its next Monetary Policy meet in October, it will further dampen the sector which is struggling to come out of the shock of demonetisation and GST.
“The realty sector is witnessing a downturn for the last three years in a row. We have seen some tepid demands in selected markets. Some revival was noted in last few months, but if there is another interest rate hike, affordable segment will be hit,” said NAREDCO president Niranjan Hiranandani. Recently, the SBI has increased the lending rate by 20 basis points across all tenors up to three years, a development followed by other lenders making home loan costlier. Now, the SBI’s overnight and one-month tenors’ Marginal Cost of Funds Based Lending Rate (MCLR) stands at 8.1 per cent as against 7.9 per cent.
If the SBI increases interest rates, the affordable segment will be badly hit. On the positive note, a depreciating Indian currency means that there is an increase in the interest of NRI home buyers. “In last few days, we have seen a sudden increase in queries from NRIs. In fact, depreciating currency is working to their advantage, as they are seeing it a good time to invest in the sector,” said a senior marketing executive from Godrej properties.