In a steadfast move reflective of its commitment to sustaining economic stability, the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) has opted to maintain the policy repo rate at 6.5% for the ninth consecutive time.
This policy direction is expected to have a significant impact on the real estate sector, particularly in terms of borrowing costs and investment sentiments, as developers and homebuyers navigate the current interest rate environment.
Rel estate industry has welcomed the the RBI’s decision to keep the policy repo rate unchanged.
Commenting on the announcement, Prashant Sharma, President, NAREDCO Maharashtra, stated that for the real estate sector, the steady interest rates are a positive signal, providing a conducive environment for homebuyers and investors alike.
“It is imperative to maintain this stability to continue fostering consumer confidence and ensuring the sustained growth of the sector. We hope that this decision will further stimulate demand in the housing market, particularly in the affordable and mid-segment categories, which are crucial for the overall development of the real estate industry.”
Niranjan Hiranandani, Chairman, NAREDCO and Hiranandani Group, stated that the RBI’s decision to maintain the repo rate unchanged is a stabilizing force in the current volatile global economic scenario.
“With the U.S. recession threats hovering, the Bangladesh crisis impacting regional capital flows, and broader global economic uncertainties, steady home loan interest rates offer a semblance of predictability. However, stakeholders must closely monitor these geopolitical undercurrents and macroeconomic indicators to adapt their strategies effectively.”
Industry data leader Anuj Puri, Chairman at ANAROCK Group, the RBI’s decision sets a positive tone for the housing industry.
“Yesterday’s announcement regarding indexation brings tax advantages for property investors, as it permits adjustments to the purchase price keeping inflation in mind, reducing capital gains tax burdens upon property sale. This provision increases the appeal of real estate investments, which will spur demand and capital flow into the housing sector. These combined actions bolster investor trust and position real estate as an avenue for long-term wealth growth,” he said.
Housing sales across the top 7 cities have been phenomenal in the last few quarters, even though prices are rising steadily. As per ANAROCK Research, we saw total housing sales of nearly 2.51 lakh units across the top 7 cities in H1 2024 – the highest half-yearly sales in the last decade.
Mr. G Hari Babu, National President of NAREDCO, has also welcomed the decision, saying that such stability allows developers to plan projects confidently, knowing that financing conditions will remain favorable.
“This period of steady rates can be leveraged by the sector to drive growth, innovation, and increased transactions, making the festive season an ideal time to capitalize on market opportunities and support economic expansion.”
Pritam Chivukula, Vice President, CREDAI-MCHI and Co-Founder & Director, Tridhaatu Realty, feels that the decision will ensure that homebuyers will continue to benefit from the favorable lending rates, encouraging more investments in the housing market.
Avneesh Sood, Director at Eros Group, stated that lower and predictable interest rates foster greater affordability in housing, bolster market confidence, and stimulate investment. As inflation trends show a decline and global economic conditions remain varied, this policy move provides crucial stability, enhancing predictability in the real estate market.
“By aligning monetary policy with growth objectives and inflation control, the RBI’s decision is poised to support continued expansion in the housing sector, offering positive prospects for future homebuyers and investors. The focus on price stability will ultimately facilitate a conducive environment for sustainable economic and real estate sector growth”.
Saying that the RBI’s decision was expected, Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd, stated that the expectation of good monsoon may prompt the apex bank to lower interest rates in the subsequent months thereby further propelling real estate sales momentum and also providing an opportunity to perspective homebuyers to enter in the market.
Rajeev Ranjan, Co-Founder & CEO, The Mentors Real Estate Advisory Pvt Ltd, added that while the unchanged repo rate continues to offer a favorable borrowing environment, it also signals the RBI’s intent to monitor inflation closely without disrupting growth.
Commending the RBI’s decision, Shraddha Kedia-Agarwal, Director, Transcon Developers, stated that this decision will help maintain the momentum in the housing market, encouraging potential buyers to invest in their dream homes with confidence. We remain optimistic that the steady rates will continue to bolster the real estate sector and support the overall economic recovery.”
Rohan Khatau (Director, CCI Projects), Samyak Jain (Director, Siddha Group), Himanshu Jain (VP – Sales, Marketing and CRM, Satellite Developers Private Limited) and Ramani Sastri (Chairman and MD, Sterling Developers) have also welcomed the RBI’s decision, saying it will will keep the ongoing sales momentum on track and boost the optimistic attitude currently prevailing in the market.
Similar views are expressed by Anantharam Varayur (Co-founder of Manasum Homes Senior Living) and Pyush Lohia, (Director, Lohia Worldspace) who stated that the RBI’s cautious yet steady approach in the face of global economic fluctuations instills confidence in investors.
Samir Jasuja (Founder & CEO of data analytics firm PropEquity), Sanjoo Bhadana (MD of 4S Developers), Aman Sarin (Director & Chief Executive Officer, Anant Raj Limited) and Mohit Jain (Managing Director, Krisumi Corporation) also welcomed the announcement, saying that RBI’s endeavour to maintain a stable policy environment will benefit not just homebuyers but also real estate developers who have the opportunity to innovate and cash in on the buoyancy.