The Indian real estate market breathed a sigh of relief when RBI decided to keep the benchmark repo rate unchanged, contrary to the expectations. As RBI decided to maintain the status quo, the repo rate stands at 6.5 percent.
The recent move comes as a pleasant surprise for real estate developers and experts who were expecting a hike in the rates. It was reported earlier that the RBI is gearing up to raise the repo rate, the rate at which the central bank lends to commercial banks, by 25 basis points to 6.75 percent.
The expectation of the RBI’s hike had created a stir in the realty market with many experts deeming such a move just before the festive season too bad for the sector. However, this ‘pause’ by RBI seems to have brought back cheer in the Indian real estate sector as several experts welcoming the move.
“For homebuyers, the timing could not have been better as lending rates are not expected to increase from current levels,” JLL India CEO & Country Head Ramesh Nair told Money Control. “Besides providing a major fillip to buyer sentiment, the RBI’s move should also translate into boosting demand.”
It seems obvious that any hike in repo rate would have badly impacted consumption sentiments and also the real estate sector. Knight Frank India CMD Shishir Baijal too reportedly declared that the pause will provide a temporary relief to the home buyer sentiment and support the festive season demand.
Although the RBI’s decision to keep the repo rate unchanged is a relief for the developers, home buyers and real estate stakeholders at large, a hike by RBI is expected in near future. Since US Fed is likely to hike their interest rates in December, RBI is expected to hike rates and home loan interest rates may get affected.