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Repo Rate Increase gives Mixed Reactions from Stalwarts of the Industry

By admin / Published on Monday, 06 Aug 2018 17:47 PM / No Comments / 188 views

 Industry feature 

It was observed that the Reserve Bank of India (RBI) hiked again the repo rate recently by 25 basis points to 6.5%. The decision was taken with the help of the six-member Monetary Policy Committee (MPC) of the RBI. ANAROCK research, nearly 60,800 units were sold in Q2 2018 across the top 7 cities of India, which is a 24% rise over the previous quarter. Amidst a 50% quarterly rise in new launches in Q2 2018 too, unsold inventory reduced by 2% from 7.11 lakh units in Q1 2018 to 7.0 lakh units in Q2 2018.

On this Anuj Puri, Chairman – ANAROCK Property Consultants said, “The 25 bps increase in the repo rate announced in third bi-monthly monetary policy was in line with our expectations. Amidst rising inflation, depreciating rupee and other global macroeconomic risks, this increase is fairly justified. While this may lead to a hike in home loan rates as well, the overall real estate sector now rests on a strong footing and buying decisions may not be altered by these marginal changes. With lucrative deals on the table, serious end-user demand is back on the market and marginal hikes in home loan rates are unlikely to deter buyers who have been sitting on the fence for some time now, waiting for the right time to seal the deal. ”

Manoj Asrani, First Executive, Brickasset Pvt Ltd said, “ Reserve Bank of India has yet again hiked the repo rate by 25 basis points in its bi-monthly monetary policy review. This would, in turn, increase the home loan EMIs, bringing in further woes for home buyers making the home EMIs even costlier. This is the second consecutive increase in repo rate by RBI which would lead to an increase in the interest that the customers pay to the bank on home loans. The hike will be a big dampener for the real estate market as it will negatively impact the sentiments of potential home buyers, especially in the affordable housing segment. Such moves are not at all in sync with the government’s vision of ‘Housing for all’ and will further afflict the sector which is still recovering from the impacts of demonetisation and implementation of GST. “

He was supported by Shishir Baijal, Chairman & Managing Director, Knight Frank India, “The 25 bps increase in the policy rate was on expected lines given the current inflationary trend. However, looking at the challenging residential market scenario, we were hoping that the RBI would have paused the rate hike thereby providing a fillip to the buyer sentiment. “

On this issues, Rohit Poddar, Poddar, Managing Director, Poddar Housing and Development Ltd pointed, “I personally believe that it’s not a surprise move by the RBI as everyone in the real estate industry was expecting this move and approach towards the Repo rate. Even though after today’s RBI announcement, an increase of 0.25%, we believe that the home buyers who are planning to take loan should not worry – as it will be difficult for many banks to increase the interest rate and I am confident that banks will still lower the EMIs towards the loan.”

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