Stability in mortgage rate to help maintain strong housing demand: Realtors on RBI policy

New Delhi, Aug 8 (PTI) The housing market will continue to see strong demand in the coming months as mortgage rates are likely to remain stable following the RBI move to keep the repo rate unchanged, according to real estate developers.

They are hopeful for a rate cut in the next monetary policy committee meeting.

Commenting on the RBI policy, realtors body CREDAI President Boman Irani said, “RBI’s decision to keep the repo rates unchanged at 6.5 per cent would maintain the borrowing costs for homebuyers and their ongoing home loan EMIs. However, we do expect and hope for a rate cut in the upcoming MPC meets, given the relatively favourable macro-economic dynamics.”

“Coupled with the festive season in the coming months, we expect the housing sales momentum to continue going into the final quarters of the 2024 calendar year,” he added.

NAREDCO President G Hari Babu the central bank’s decision creates a stable environment for the real estate sector.

“With steady borrowing costs, home loans become more affordable, which is likely to boost demand in the housing market, especially during the upcoming festive season. This stability allows developers to plan projects confidently, knowing that financing conditions will remain favourable,” he added.

The Reserve Bank of India expectedly kept the benchmark interest rate and stance unchanged for the ninth straight policy meeting, saying it cannot afford to look through persisting high food inflation and has to remain vigilant to prevent spillover.

Leading housing brokerage firm Anarock Chairman Anuj Puri said this sets a positive tone for the housing industry.

“Maintaining interest rates offers consistency in borrowing costs, which will prompt more aspiring homebuyers to consider taking the plunge – and thus drive demand in the housing market. With interest rates staying steady, EMIs will remain manageable for current and potential homeowners, potentially leading to increased home sales – particularly in the price-sensitive affordable segment,” he added.

Housing.com Group Chief Executive Officer Dhruv Agarwala noted that stable home loan interest rates continue to support robust demand in India’s housing sector.

Real estate data analytic firm PropEquity CEO Samir Jasuja said, “Any rate hike would have halted the real estate sales momentum which in the past few years have been on an upward trajectory. Going forward, a reduction in the benchmark interest rate will go a long way in providing a further boost to the real estate sector, a major segment of the economy.”

Shrinivas Rao, CEO of Vestian, said that the steady monetary policy for the past one-and-a-half years has ensured stability in the real estate sector, boosting demand for all asset classes.

Among developers, Gurugram-based Krisumi Corporation Managing Director Mohit Jain said, “While a rate cut would have been an ideal scenario to propel economic growth across industries, including real estate, maintaining the status quo will help prevent borrowing cost from rising, enable affordability, propel the residential demand and boost the overall economy.”

Bengaluru-based Sterling Developers CMD Ramani Sastri said the decision fosters consumer confidence and offers a sense of continuity and predictability to the real estate sector, which is already witnessing a strong demand from end-users.

“The decision will keep the ongoing sales momentum on track and boost the optimistic attitude currently prevailing in the market,” he added.

Nayan Raheja of Delhi-NCR-based Raheja Developers said, “As luxury housing gains momentum, maintaining the status quo will further boost the demand for more properties and strengthen market confidence.”

Santosh Agarwal, CFO and Executive Director of NCR-based Alphacorp, said the stability in interest rates provides a predictable environment, which is crucial for both developers and homebuyers.

Mumbai-based Siddha Group director Samyak Jain welcomed the RBI’s decision saying that the move provides continued stability, allowing homebuyers to benefit from favourable interest rates.

Sanjoo Bhadana, MD of Gurugram-based 4S Developers, said maintaining the status quo will help prevent borrowing costs from rising. “A 50-75 basis points reduction in benchmark interest rate in the coming months will further boost the sentiments of prospective homebuyers as well as realtors,” he said.

Vishal Raheja, Founder & MD of Noida-based brokerage firm InvestoXpert, said keeping the repo rate status quo can help developers retain current project financing costs, which is principal in financial planning and actual project execution.