RBI maintains repo rate at 6.50%: real estate sector reactions to the accommodative stance

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    The Shaktikanta Das-led Monetary Policy Committee (MPC) unanimously opted to maintain the status quo of the repo rate at 6.50 percent for a third straight meeting in an effort to keep an upward momentum in the economic scenario of the country. The MPC has maintained its “accommodative” stance on the interest rate hike. The real estate developers have received the decision warmly which will help in revving up the positive developments in the sector.

    Dr. Niranjan Hiranandani, The National Vice Chairman of NAREDCO

    The RBI’s pause in rate hikes over the past few quarters will certainly drive up real estate growth. With stronger domestic consumption and NRI demand, the upcoming festive tailwinds are expected to create demand traction in the ownership and built-to-rent housing segments. In recent years, corporate balance sheets have improved due to ample liquidity, market consolidation, alternative funding avenues, and heavy debt servicing. Consequently, the market is experiencing a supply catch-up to meet the soaring demand for mid-priced and luxury housing, while the weakening demand for affordable housing represents a spoiler alert.

    I believe the Indian commercial segment is attractive to global players due to its cost effectiveness and availability of skilled talent. A sustained economic expansion has led to a rise in the demand for office spaces, organized retail spaces, and warehouses in Indian commercial real estate. There is, however, a possibility that tenants will consolidate and reorganize offices as flex workspaces become more popular. Real GDP growth pegged at 6.5% for FY 23–24 is in anticipation of the Indian economy’s resilience to withstand geo-political upheaval due to global realignment. India is enjoying its goldilocks moment as economic activities rebound, with an uptick in private and public capex, enhanced capacity utilization, robust domestic demand, and favorable demographic dividends.

    Vikas Garg, Joint Managing Director, Ganga Realty
    The decision will further help in stabilizing the housing demand and maintaining a positive equilibrium in the property markets. By keeping the repo rate unchanged, the RBI has maintained the monetary policy of an industry-friendly stand that will support the consolidation of trends which will churn out great results for the real estate sector. It will also help in keeping the macroeconomic conditions steady and perfectly aligns with RBI’s commitment to stamp out inflationary concerns and bring it down to 4%.

    Saransh Trehan, Managing Director, Trehan Group
    The maintenance of the repo rate stand by leaving it unchanged will keep the growth statistics even-grounded for the real estate sector. The housing demand has been rising continuously and the RBI MPC policy continues to add great value to property-friendly sentiments of the buyers planning to soak in money in real estate assets. The inflationary rates will further crater down by this RBI move which is undoubtedly decreasing but continues to pinch the construction and allied sectors and stymie the overall economic climate. The RBI has been impelled to take decisive actions to achieve its inflation target of 4% and by keeping the repo rates unchanged, it will significantly achieve its objectives.

    Mr. Rajan Bandelkar, National President of NAREDCO

    The decision of the Reserve Bank of India’s Monetary Policy Committee to keep the repo rates unchanged is a significant development for the real estate sector. The stability in interest rates comes as a relief for developers who have been navigating a complex economic landscape. The unchanged rates provide a certain degree of predictability, which is essential for planning and executing long-term projects. This decision aligns well with our industry’s need for consistency and fosters an environment of cautious optimism. However, we hope that the central bank remains attuned to the evolving market dynamics and continues to support growth-oriented measures. The real estate developers’ body acknowledges the careful balancing act that the RBI is performing, considering various economic factors. As we move forward, we anticipate collaborative efforts between the industry and regulatory authorities to ensure a robust real estate sector that contributes to the nation’s economic resurgence.

    Dr Nitesh Kumar  MD @ CEO Emami Realty

    RBI maintains status quo with repo rate on pause despite global economic uncertainties and inflation. Homebuying sentiments will be boosted. In addition to strong macroeconomic fundamentals, the country’s economy is performing well. To boost overall market confidence and make home buying more appealing, the continuation of existing policy rates and possibly a further reduction in interest rates would be preferable. Domestic consumption and NRI demand are expected to increase with this policy decision  during the festive season for real estate.

    Overall, the real estate sector has only to gain and nothing to lose from the current RBI repo rate stance. The housing sales have been pretty impressive with not only luxury but also premium and mid-segment bracket homes regaining its hold in the markets. The move will motivate and incentivise buyers to invest in property markets even more.

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