NEW DELHI: The real estate industry on Friday welcomed the RBI's decision to keep key policy rates unchanged, saying the interest rates on home loans will remain at a historically low level and housing sales may rise by up to 40 per cent during this festival quarter.
The Reserve Bank of India (RBI) decided to keep the benchmark interest rate unchanged at 4 per cent. This is the eighth time in a row that the RBI has maintained the status quo. "RBI's move of keeping the repo rate at 4 per cent and reverse repo rate at 3.55 per cent is a welcome move. The acknowledgement of taking an accommodative stance while having indicators of economic recovery is a message in the right direction," CREDAI President Harsh Vardhan Patodia said.
"While inflation has been better than expected with the festive season coming in and RBI keeping rates at status quo we look forward to more support from bankers on home loans to push the festive sales cheer," he said.
NAREDCO-Maharashtra President Ashok Mohanani said the interest rates will continue to be at a record low for some time and this is the best time to buy homes.
Anshuman Magazine, Chairman & CEO, India, South-East Asia, Middle East & Africa, CBRE, said he expects residential sales to further increase in the coming months as home loan rates would remain cheap.
Anarock Chairman Anuj Puri said: "In short for homebuyers, the low home loan interest rates regime will continue in the market and help foster housing demand during the ongoing festive season. Notably, this is a period when housing sales usually surge on the back of attractive offers by developers and lending banks." The ongoing festive quarter will see at least a 35-40 per cent yearly rise in overall housing sales across the top 7 cities as against the same period in 2020, he said.
In Q4 2020, the top seven cities saw total housing sales of nearly 50,900 units. Colliers India CEO Ramesh Nair said: "It will go a long way in steering housing sales. Several banks have already lowered their home loan rates by a stable repo rate since September 2021. Overall, it is a good time for homebuyers who can avail of low home loan rates, along with steady prices."
Hailing the RBI's move, India Sotheby's International Realty CEO Amit Goyal said: "This will mean a continuation of low home loan rates which will keep the demand momentum for homes going." Knight Frank India CMD Shishir Baijal said the decision to maintain the status quo on key policy rates is significant as it comes at the onset of the festive season.
The RBI's accommodative stance will allow banks to continue providing home loans at the current levels, he added.
Baijal said there has been a fundamental change in buyers' expectations and attitudes towards homeownership, which has resulted in the residential real estate sector performing exceedingly well across all segments.
Vikas Wadhawan, Group CFO, Housing.com, Makaan.com and Proptiger.com, said the interest rates on home loans will continue at a historical low during the festive season, which is crucial for the revival of the housing sector as well as the economy.
"Low mortgage rates coupled with developers' festive offers will drive demand in a big way this quarter. We request all States to reduce stamp duties on registration of properties till December. This could turn out to be a game-changer," he said.
Samantak Das, Chief Economist and Head Research, JLL India, said the RBI's decision to keep the policy rates unchanged is expected to act as key policy support to nurture the sustained growth of the economy.
Signature Global Chairman Pradeep Aggarwal said, "Customers should take advantage of the current situation because prices may rise in the future owing to higher raw material costs, while Central Park CMD Amarjit Bakshi said the decision to maintain the repo rate will help a lot in terms of retaining buyer sentiment.
Gurugram-based M3M Director Pankaj Bansal said the RBI's decision will help the real estate market to accelerate its growth.
"Maintaining the accommodative stance will enable the banks to lend home loans at the current level which is a most encouraging factor for homebuyers' decisions," said Santosh Agarwal, CFO and Executive Director, Alpha Corp.
Silverglades Group CEO Anubhav Jain said the festive season has started on a good note and housing demand is expected to rise given the low home loan interest rates and improving economic scenario.
New Modern Buildwell - a real estate company having projects in Varanasi and Allahabad - MD Pradeep Misra said the home loan interest rates would continue to remain low and this will help the real estate sector, particularly in tier 2 & 3 cities.
He expected significant surge in housing demand during the festive season. Ram Raheja, Director and Head-Director & Design at S Raheja Realty, said the real estate sector is expected to continue benefiting from the pass-through of low benchmark lending rates to end consumers, especially in the residential segment.
Runwal group MD Sandeep Runwal said the low mortgage rates would continue for at least some more time now or maybe until the end of the year.
However, Investors Clinic Founder Honeyy Katiyal said the RBI should have announced a rate cut to support the demand in the real-estate sector for the coming festival season.