RBI keeps repo rate unchanged; Should home buyers cheer?

“ANAROCK research indicates that we may see at least 10-15 percent growth in housing demand in the ongoing festive period (October-December) across the top 7 cities against the preceding quarter. If ANAROCK's predictions are accurate, the ongoing festive quarter will see at least a 35-40 percent yearly rise in overall housing sales across the top 7 cities as against the same period in 2020,” Puri said.

Adding to this, Ram Raheja, Director, S Raheja Realty Pvt Ltd said that an unchanged repo rate will further allow demand creation including for high involvement products like real estate.

“RBI's resolve to keep low interest is key to the recovery of the real estate industry and the overall economy. The real estate sector is expected to continue benefiting from the pass-through of low benchmark lending rates to end consumers, especially in the residential segment. The demand for homes is likely to continue to gain momentum going forward,” he said.

Welcoming the move, Divaker Bhalla, Founder at iProp.Money said that the stable rates will bring in the much-needed activity in the sector during the ongoing festival season.

Further, Shishir Baijal, Chairman and Managing Director at Knight Frank India believes that RBI’s accommodative stance will allow banks to continue providing home loans at the current levels.

"Over the last few quarters, there has been a fundamental change in buyers’ expectations and attitude towards home ownership, which has resulted in the residential real estate sector perform exceedingly well across all segments. Many factors, especially demand stimulants like stamp duty cut and lower circle rates along with the lowest ever home loan rates, have helped in converting latent demand to sales. At this juncture, we are favorably poised with an encouraging ramp up on vaccination rate across the country, ongoing festive season, and opening up of the country, the time is right to ensure an orbital shift for the industry," Baijal pointed out.

Home loan interest rates have already gone down substantially in the recent past, and are presently at an all-time low and property prices have been stable.

Hence, according to Ramani Sastri - Chairman and MD at Sterling Developers Pvt. Ltd, this is the right time for prospective home buyers to invest.

"Homebuyers will continue to take advantage of the lowest ever home loan interest rates. The move to reduce interest rates by few banks recently is encouraging and will pave a path for robust housing demand further. We are seeing a lot of first-time home buyers, who were not able to reach a decision in the previous quarters due to the lockdown are eager to conclude the deal now," Sastri added.

Yash Gupta, Equity Research Analyst at Angel One Ltd further believes that this policy will help banks to keep home loan interest rates at the current rate or even some dip in it in the coming months.