Reserve Bank of India (RBI) announced on December 8, its Monetary Policy Committee meeting has decided to keep the key policy repo rate unchanged at 6.5 percent. This decision was at the back drop of good GDP growth and Domestic economic activity exhibiting resilience. The food price risks are evenly balanced, even though Global growth is slowing at a divergent pace across economies. The announcement could have a positive impact on consumer sentiment, benefiting the interest-sensitive sectors of Indian economy. Real Estate Industry leaders shared their views with Team Estrade, as follows
Boman Irani, President, CREDAI National
“As anticipated, the RBI continues to keep the repo rate at 6.5%. However, the Indian real estate industry and the economy at large would have greatly benefitted from a rate cut, given that current macro-economic parameters are favourable and the rate has been maintained at 6.5% for the last 3 quarters. This move will keep home loan rates and cost of buying a house on the higher side for consumers and we hope that it does not disrupt homebuyers’ sentiments. With inflation relatively in check, economy growing at a faster than expected pace, reasonably good monsoon, RBI could have opted for a rate cut that would have provided the ideal opportunity to accelerate housing momentum and overall consumer spending, not just positively impacting growth of real estate but other sectors too.”
Sandeep Runwal – President, NAREDCO Maharashtra
“The RBI’s decision to maintain status quo on the repo rates at 6.50 per cent is a welcome move. The RBI has effectively managed to keep inflation rates within acceptable boundaries. The positive sentiments being witnessed among home buyers and need for home ownership has been amply reflected in the excellent home sale figures generated in the past few quarters. Also, the government has implemented a range of constructive policy measures that have sustained the housing sales momentum. It is our hope that these positive advancements will uphold the enthusiasm of homebuyers, encouraging them to step forward and buy their dream home. We certainly see this healthy sales momentum continuing into the New Year as well. We hope for the repo rate reduction next year onwards.”
Pritam Chivukula – Vice President, CREDAI-MCHI and Co-Founder & Director, Tridhaatu Realty
“The RBI’s decision to keep the repo rate unchanged at 6.50 per cent is in line with keeping inflation aligned with target while maintaining liquidity and supporting growth. The ongoing festive season has seen excellent housing demand from home buyers, with sales recording an all time high. Recent government initiatives have been very supportive to the housing sector. The real estate market has been buoyant on the back of appropriate government intervention along with positive policy measures that will insulate the economy from global headwinds.”
Anshul Jain, Managing Director, India & Southeast Asia and Head of APAC Tenant Representation, Cushman & Wakefield,
“RBI’s decision to hold the repo rate at 6.5% bodes well for Indian Real Estate and its ancillary industries, as it is expected to maintain the ongoing momentum in housing registrations in the final month of the year. With GDP growing at 7.6% in the July to September quarter – faster than the expected rate – Inflation relatively in check, the macro-economic indicators seem healthy enough and should act as an ideal platform for sustained infrastructural and economic growth. We can expect more homebuyers and fence-sitters coming to the fore and fulfilling their property purchases towards the end of this quarter and going into 2024. From a borrowing cost perspective, this move also ensures that homebuyers’ EMIs don’t increase whereas for developers, it doesn’t increase their financial burden owing to the consistent rate of cost of capital.”
Dr. Sachin Chopda – Managing Director, Pushpam Group
“We appreciate the RBI’s decision to maintain the status quo on key interest rates. In recent years, there has been a significant increase in real estate investments, driven largely by its ability to provide investors with substantial returns on their capital and its rising appeal as an asset class in comparison to alternative investment options. Going forward, this decision is likely to encourage prospective homebuyers to proceed with finalizing their property investments.”
Aakash Patel, Director, Atul Projects India Pvt Ltd.
“The RBI’s decision to maintain the repo rate at 6.50 percent is a positive move in the right direction. It will contribute to maintaining liquidity and control inflation in the economy. This decision will convince prospective home buyers that now is the opportune moment to proceed with the purchase of their much-anticipated dream homes. This, in turn, is expected to sustain the momentum in home sales.”
Ramani Sastri, Chairman and MD, Sterling Developers
The pause in policy rate augurs well for the residential real estate sector. The economy is looking robust with high investments across businesses in recent times. A recovery in property prices and rise in yields has made investment in residential properties attractive yet again and has been responsible for continued demand in the sector. The long-term benefits of owning a home have led to sustainable growth in the segment and we see this up-cycle continuing in 2024. An increase in earning potential, end user-driven demand, a need for a better standard of living and the growing base of aspirational consumers and their lifestyle changes has led to substantial demand and growth in the sector. With economic growth, the premium housing segment too will continue to witness higher demand in the future. Going forward, there can be further uptick in demand with reduction in rates, making it even more enticing for prospective homebuyers and bolster overall market confidence. We are also expecting significant growth in the near future, building on the success of this year and the continued strong demand in the real estate sector driven primarily by burgeoning aspirations. We will continue to see a multi-fold growth in real estate investments since the real estate market is less volatile than other investment markets and delivers higher returns. Overall, consumers are keen to buy homes as stability and security is on top of their mind now and the recent past has been testament to the fact that home buyer confidence is at an all-time high.
Samyak Jain, Director, Siddha Group
“The RBI’s decision to maintain the repo rate at 6.50% is a welcome move. This will help to keep inflation in check and also ensure adequate liquidity in the economy. The real estate market is doing well with a constant flow of buyers visiting the sites and good sales. The need for home ownership coupled with rising income and high aspiration levels have given a strong thrust to housing demand. We expect this positive trajectory to continue into the New Year.”
Himanshu Jain, VP – Sales, Marketing and CRM, Satellite Developers Private Limited (SDPL)
“We welcome the RBI’s decision to keep the repo rate unchanged at 6.50 per cent as it will keep a check on inflation while maintaining liquidity in the economy. We have seen home sales peak during Diwali and there is a strong demand for housing from prospective home buyers. This decision will further encourage potential home buyers to come forward and finally buy their desired home.”
Rohan Khatau, Director, CCI Projects
“The RBI’s prudent decision is poised to curb inflationary pressures in the economy. This strategic move aligns with the current peak in market sentiments and robust home sales. By temporarily holding the repo rate, more funds will be available to potential home buyers. Given the significance of home ownership and the optimistic outlook among potential buyers, it is anticipated that prospective homebuyers will seize this opportunity to initiate their home purchases.”
Prashant Khandelwal, CEO – Agami
“The RBI’s decision to maintain the repo rate at 6.50% aligns with the government’s commitment to curbing inflation while ensuring ample liquidity in the economy. The Mumbai real estate landscape has witnessed remarkable residential transactions during the festive season, signaling a positive trend in the housing sector. The government’s proactive support for the real estate industry through well-structured policies has contributed to this optimistic scenario. Combined with an uplift in market sentiments, increased aspirations, and income levels, there has been a surge in housing demand, driving home sales. Taking these elements into consideration, we anticipate a sustained robustness in housing demand in the coming days as well.”
Srikanth C – Managing Director, Intercontinental Infrastructure
“We had anticipated the RBI to maintain a pause in policy rates. The long-term benefits of homeownership have fueled steady growth in the residential segment, sustaining demand in the real estate sector. Going forward, a potential reduction in interest rates in the near future would be favorable to bolster overall market confidence and enhance the attractiveness for potential homebuyers.”
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RBI Keeps Repo Rate Unchanged@6.5%
