RBI Rate Hike Impact on Realty: Real estate development companies said on Wednesday that the Reserve Bank of India’s (RBI) decision to increase the policy rate repo will make loans costlier. This is expected to affect the demand for houses in the short term. However, he also welcomed the decision to increase the existing limit of individual home loans for cooperative banks. RBI has increased the key policy rate repo by 0.5 percent to 4.90 percent in the monetary policy review.
The decision to increase the repo rate will affect the demand for homes in the short run: Realty companies
Real estate companies say that this will increase the cost of loans and affect their profit margins. However, he hopes that this move of the central bank will bring inflation under control, which will make raw materials like steel and cement cheaper.
Harsh Vardhan Patodia, National President, CREDAI (Confederation of Real Estate Developers Association of India) said, “The rate hike by RBI will make home loans costlier. This may affect the demand in the short run. However, he has decided to increase the rates of urban co-operative banks and rural co-operative banks. Welcome to increase the limit of personal home loan to 100%.
Rajan Bandelkar, President, NAREDCO (National Real Estate Development Council), a body of realty companies, said, “The hike in the policy rate will affect the sale of residential houses especially in the short run. This sector was gaining momentum at the rate.”
Hiranandani Group Managing Director Niranjan Hiranandani said that the increase in interest on housing loans will affect the pace of purchases as the monthly installment is set to increase. However, he added, “the impact will be temporary as home loans are based on ‘floating rate’ in the long run.”
Manoj Gaur, Chairman and Managing Director, Gaur Group, said, “The RBI’s decision is a good one to strike a balance. The increase in repo rate by 0.50 per cent will make loans costlier. However, curbing inflation will ultimately benefit the real estate sector, which is affected by higher raw material costs.”
Tata Realty And Infrastructure
Sanjay Dutt, Managing Director and CEO, Tata Realty and Infrastructure said that the decision to increase the loan limit for cooperative banks is a positive step. This will encourage housing development in small towns.
WESTERN UP CREDIT
CREDAI (Western Uttar Pradesh) President Amit Modi said, “A 0.5 per cent hike in the repo rate will affect the sentiments of the buyers. This will especially affect first-time home buyers who are heavily dependent on home loans.”
Kushagra Ansal of Ansal Housing said that the decision to increase the repo rate is a step taken by the RBI to reduce inflation. This will also bring down the cost of raw materials, which will benefit the sector.”
Uddhav Poddar, Managing Director, Bhumika Group, said, “The increase in the repo rate of RBI will certainly affect the demand in real estate, but we are hopeful that this decision will help in bringing inflation back to normalcy and in the long run, the real estate sector will be affected by the demand. The economy, including the estate, will benefit.”
Signature Global (India)
Pradeep Aggarwal, President, Signature Global (India) Ltd. said, “There was no other option but to check inflation through monetary measures. This may impact the real estate sector slightly, but it will affect consumer confidence. Also, increasing the limit of individual home loans for co-operative banks will definitely benefit the sector.”
Dharmesh Shah, CEO, Hero Homes said, “RBI’s move will lead to an increase in home loan rates. This will affect home buyers. But it will only affect residential sales for a short period of time.”
Sanjay Sharma, Director, SKA Group, said, “Definitely this move by RBI will impact the sentiments of home buyers, but at the same time this move will also bring relief and benefit the sector which is battling high cost of raw materials. “