The real estate industry will benefit in order to maintain its present growth pace. The basic lending rate increased as a result of the latest three adjustments, which were fully approved. In actuality, 250bps were added to the repo rates, making it 160bps currently. The demand for homes has started to be impacted by it, especially in the affordable market.
Over the previous several quarters, there has also been a slowdown in the growth of the middle segment. Increased REPO rates may also hurt buyer sentiment and property affordability. The impact of a shift in the MPC rate on house loans can be significant.
Conversely, the commercial banks will pay more to borrow money from the RBI if the MPC raises the repo rate. This will be costly because interest rates on loans like home loans will probably increase along with the cost of funds for banks. Consequently, this implies that banks must bear increased funding costs, which drives up interest rates on all loans, including home loans.