Impact on real estate sector
Every common man dreams of owning his own house, but due to the fear of inflation and rising interest rates, this dream often starts getting blurred. In such a situation, the news coming from the Reserve Bank of India (RBI) has not only brought relief, but has also awakened a new hope in the real estate market. RBI has decided to maintain the repo rate at 5.25 percent. If you are thinking of taking a home loan or your EMI is already running, then this news is no less than a lifesaver for you. This decision has brought smiles on the faces of both home buyers and developers.
Will the journey home become easier now?
In fact, when the repo rate increases, loans from banks become expensive and its direct burden falls on the common man’s pocket. But this time RBI has not made any change in the rates. Santosh Aggarwal, CFO of Alpha Corp Development Limited, believes that this stability was very important. According to him, when interest rates remain stable, it helps developers to accurately estimate the cost of their projects.
You, the customer, gets its direct benefit. When the builder does not have to bear the additional burden of interest, he does not suddenly increase the prices of the houses. Aggarwal says that this step of the Monetary Policy Committee increases confidence. This ensures that affordable housing options remain available in the market and buyers can get quality homes at the right time.
Direct impact on your EMI
Aman Trehan, Executive Director of Trehan Iris, has said something very practical while welcoming this decision. He believes that due to stability in interest rates, buyers can plan their EMIs in a better way. Meanwhile, Saransh Trehan, Managing Director of Trehan Group, believes that this decision of RBI is going to bring stability in the market. He said that when interest rates remain stable, it becomes easier to estimate the home loan EMI correctly. This is very important for those ‘genuine buyers’ who are buying a home for self-occupancy rather than as an investment.
He says that amidst the increasing demand in cities and improving infrastructure, this decision also gives confidence to developers to make long-term plans. According to Trehan, this move will maintain demand not only in residential but also commercial real estate. This ‘neutral’ stance sends a positive message to the market that investing right now is a safe and sensible move.
Vigor returned to the real estate market
Not only home buyers, but the entire real estate sector is looking at this decision as a booster dose. Ashish Sharma of Brahma Group says that RBI has struck an excellent balance between controlling inflation and promoting growth. According to him, the repo rate remaining at 5.25 percent shows a clear picture to the market. Whereas Neeraj K, Executive Director of Ganga Realty. Mishra has described this decision as a ‘sigh of relief’ for the housing market.
He says that if the repo rate had been lower then perhaps houses would have become more affordable, but the stability of the rates is also a positive sign in itself. According to Mishra, “This stability will remove fear from the minds of buyers and they will be able to take decisions without hesitation. The biggest benefit from this will be the mid-income and premium housing sector, where purchases are now expected to increase. Also, developers will also now be able to do long-term planning without any hesitation.”