The Reserve Bank of India's (RBI) decision to keep key policy rates unchanged will lead to continuation of low interest rates on home loans and support ongoing recovery of housing demand, according to property developers and consultants.
Welcoming the RBI policy, CREDAI President Harshvardhan Patodia said the "RBI's accommodative stance on keeping the repo and reverse repo rate unchanged is undoubtedly a progressive and cautious move especially in times when the entire industry is carefully assessing the possible impact of the new Omicron wave."
The continuation of low home loan interest rate regime is bound to instill more confidence to the homebuyers and support the ongoing market and economic recovery which has been promising, post a good festive season, he added.
Niranjan Hiranandani, vice-chairman of NAREDCO and MD of Hiranandani Group, said the real estate sector will benefit from the low home loan interest rates which continue as a result of the RBI MPC's decision.
"Homebuyers should make the most of historic low home loan interest rates regime," he said. Tata Realty and Infrastructure MD and CEO Sanjay Dutt said the decision to keep rates unchanged will provide an opportunity for low interest regime, which would support the residential market and enable homebuyers to avail all-time low home loan rates to buy their dream homes.
"Furthermore, real estate has been at the forefront of driving the economy on the growth path at a high pace, and this decision will encourage homebuyers to opt for and invest in their dream homes as the window for the rate change has been shortened," he added.
Puravankara Managing Director Ashish R Puravankara said the last few quarters have seen robust sales within the real estate sector across different asset classes. "The accommodative stance has fuelled the rise of aspirational buyers, who can now claim loans, taking advantage of the all-time low-interest regime. This status quo is especially relevant now to sustain buyer confidence amid the concerns of the new COVID-19 variant," Puravankara added.
Omaxe Ltd MD Mohit Goel said the move will support the revival of businesses sensitive to interest rate movements. "Low lending rates will be the biggest factor in further augmenting the economic growth and kick-starting the stagnant business activities, including real estate."
Santosh Agarwal, CFO and executive director of Alpha Corp, said the announcement will certainly bring cheer for the housing sector and help boost the economy. "Sustaining the accommodative stance will enable banks to lend home loans at the current level which is a most promising factor for homebuyers'' decisions," Agarwal said.
Among property consultants, Anshuman Magazine, chairman and CEO (India, South-East Asia, Middle East & Africa) of CBRE, said this steady stance will augur well for home loan borrowers and India's real estate market.
Amit Goyal, CEO of India Sotheby's International Realty, said the home loan interest rate will remain at the current level of sub-7 per cent per annum. "We expect demand in the housing market to improve further. All eyes are now on the upcoming budget. It will boost the real estate sector if the government enhances deductions against home loans in Budget 2022," he added.
Dhruv Agarwala, Group CEO of Housing.com, Makaan.com and Proptiger.com, said the RBI''s decision to keep key policy rates unchanged is along expected lines. "If home sales have shown consistent improvement over the past couple of quarters, much of this can be attributed to the record low interest rate regime. Upsetting the current momentum would have been highly detrimental to the overall economic recovery," he said.
Anarock Chairman Anuj Puri said the unchanged repo rates will help maintain status quo on the prevailing low interest rate regime for some more time. "This works well for all home loan borrowers as the environment of affordability will continue," Puri said.
Knight Frank India Chairman and Managing Director Shishir Baijal said the low interest rate regime has been instrumental in reviving the real estate sector in the past six quarters. "The RBI's efforts, along with other demand stimulant measures, have helped revive demand that had been languishing for close to seven years prior to 2020. The continuance of the accommodative stance will help further the cause for the sector," he added.
Colliers India CEO Ramesh Nair said the unchanged repo rate will continue to improve sentiments in the real estate sector. "The housing sector is already seeing a revival in sales, led by low home loan rates, pent-up demand, and stable prices," he added.
Samantak Das, chief economist and head of research & REIS (India) at JLL, said the real estate sector is expected to benefit from a regime of low mortgage rate, coupled with duty waivers, realistic property pricing and attractive offers leading to affordable synergy.