RBI's MPC meet: Pause on repo rate to boost home sales further, say realtors
As the central banker kept the REPO rate intact in its latest monetary policy committee meet, real estate sector is expected to gain further in coming months.
- Dec 8, 2023,
- Updated Dec 8, 2023 2:53 PM IST
The Reserve Bank of India’s (RBI) monetary policy committee (MPC) kept the repo rate unchanged in its latest round of bi-monthly meet. The move essentially means the lending rates for homes and cars to remain the same for at least the next two months - adding cheer to real estate developers and industry stakeholders alike.
Apart from a stable interest rate that is expected to encourage potential homebuyers to take the plunge, it will also help developers plan their launches and new projects more confidently. As a result, the industry stakeholders - from leading realtors to experts and analysts - are now predicting additional boost it home sales over the next couple of months. Resultantly, in calendar year 2023 home sales could grow by a massive 25-30 per cent over last year, many said.
“The housing sector, which has been on a positive trajectory, receives a further boost with the RBI’s decision to maintain the status quo. The market is receptive to the current 6.5 per cent repo rate. New launches by leading developers have received enthusiastic responses; unsold inventory is at an all-time low, and demand for premium and luxury projects has reached unprecedented levels. 2023 has been a spectacular year for the real estate sector. RBI keeping the repo rate unchanged for the seventh consecutive time signals stability will benefit the sector,” says Manoj Gaur, Chairman and Managing Director, Gaurs Group and President of CREDAI-NCR.
According to Vimal Nadar, Senior Director, Research at Colliers India, as the housing market continues to outperform 2022 sales, an unchanged repo rate signals steady interest rates for prospective homebuyers and developers. “This will aid a stronger 2023 with sales expected to be higher by 20-30 per cent compared to 2022. Steady interest rates will continue to fuel sentiment buoyancy in the market, keeping the housing market on a higher growth trajectory as we begin 2024,” he says.
Mohit Goel, MD, Omaxe Group says, the consumer demand has been at par for quite some time, with the festive season also turning out to be promising for the real estate sector. Stable interest rates would further elevate buyers’ trust in investing their finances in the sector, benefitting the developers.
“The undertone however remains precautionary over inflation risks in the upcoming months due to seasonal volatility in food prices. The decision will continue to support the existing momentum of residential real estate demand in India. Despite the escalations in the borrowing costs, the overall housing market has continued to remain upbeat; however, the momentum in the affordable segment has lagged. Thus, a pause is supportive of catering to the housing needs of the vulnerable segment,” said Shishir Baijal, CMD, Knight Frank India.
Also Read: RBI MPC: Governor Shaktikanta Das keeps repo rate unchanged at 6.5% for fifth consecutive time
The Reserve Bank of India’s (RBI) monetary policy committee (MPC) kept the repo rate unchanged in its latest round of bi-monthly meet. The move essentially means the lending rates for homes and cars to remain the same for at least the next two months - adding cheer to real estate developers and industry stakeholders alike.
Apart from a stable interest rate that is expected to encourage potential homebuyers to take the plunge, it will also help developers plan their launches and new projects more confidently. As a result, the industry stakeholders - from leading realtors to experts and analysts - are now predicting additional boost it home sales over the next couple of months. Resultantly, in calendar year 2023 home sales could grow by a massive 25-30 per cent over last year, many said.
“The housing sector, which has been on a positive trajectory, receives a further boost with the RBI’s decision to maintain the status quo. The market is receptive to the current 6.5 per cent repo rate. New launches by leading developers have received enthusiastic responses; unsold inventory is at an all-time low, and demand for premium and luxury projects has reached unprecedented levels. 2023 has been a spectacular year for the real estate sector. RBI keeping the repo rate unchanged for the seventh consecutive time signals stability will benefit the sector,” says Manoj Gaur, Chairman and Managing Director, Gaurs Group and President of CREDAI-NCR.
According to Vimal Nadar, Senior Director, Research at Colliers India, as the housing market continues to outperform 2022 sales, an unchanged repo rate signals steady interest rates for prospective homebuyers and developers. “This will aid a stronger 2023 with sales expected to be higher by 20-30 per cent compared to 2022. Steady interest rates will continue to fuel sentiment buoyancy in the market, keeping the housing market on a higher growth trajectory as we begin 2024,” he says.
Mohit Goel, MD, Omaxe Group says, the consumer demand has been at par for quite some time, with the festive season also turning out to be promising for the real estate sector. Stable interest rates would further elevate buyers’ trust in investing their finances in the sector, benefitting the developers.
“The undertone however remains precautionary over inflation risks in the upcoming months due to seasonal volatility in food prices. The decision will continue to support the existing momentum of residential real estate demand in India. Despite the escalations in the borrowing costs, the overall housing market has continued to remain upbeat; however, the momentum in the affordable segment has lagged. Thus, a pause is supportive of catering to the housing needs of the vulnerable segment,” said Shishir Baijal, CMD, Knight Frank India.
Also Read: RBI MPC: Governor Shaktikanta Das keeps repo rate unchanged at 6.5% for fifth consecutive time