The Reserve Bank Of India (RBI) announced thea Repo Rate as Unchanged At 6.5% for the eighth time in a row. This decision by the RBI got positive reactions from the real estate sector. The leaders from the sector claims the decision will boost the growth of real estate sector in near future also will strengthen the Indian economy overall.
Speaking about the decision, Anurag Mathur, CEO, Savills India “The Monetary Policy Committee (MPC) of the RBI decided to keep the interest rates unchanged at 6.5%, leading to a rate pause for the eighth consecutive time in its policy decision. Although core inflation declined steadily for 11 months, the MPC has decided to remain focused on its stance of 'Withdrawal of Accommodation' to progressively align the inflation with the target while supporting the economic growth.
Owing to expectations of above-average monsoon along with the strengthening of manufacturing sector, FY25 GDP is projected at 7.2%. Similarly, inflation for FY25 is expected to soften to 4.5% but volatility in food prices remains a major challenge. In summary, the RBI's policy decision to maintain status quo fosters consumer confidence and bodes well for the already thriving economy, especially the housing sector which is already witnessing a strong demand across all major cities of India. However, near-term fluctuations in food inflation will have to be monitored and tackled prudently.”
Rajat Khandelwal, Group CEO, Tribeca Developers "The RBI's announcement to keep the repo rate at 6.5% gives optimism to the property sector. With interest rates remaining stable, home loans will continue to remain accessible and affordable, allowing the market to expand further. This development is expected to create more confidence among buyers and trigger positive trends in home buying. As a result, it is expected to stimulate additional property investment, boosting its growth and strengthening the Indian economic landscape.”
Pradeep Aggarwal, Founder & Chairman, of Signature Global (India) Ltd said, “We welcome the apex bank's strategic move to hold rates steady for the eighth consecutive time. This decision reflects a careful balance between addressing high food inflation and maintaining overall economic stability, with the Consumer Price Index (CPI) staying within the target range. However, economists anticipate that if inflation continues to decline, we might see rate cuts of 25-50 basis points in the second half of the fiscal year. Such reductions in interest rates could be introduced in future policy reviews. If these rate cuts materialize, they could significantly boost the real estate sector, which is already experiencing strong demand from end-users. Lower interest rates would make borrowing cheaper, encouraging more people to invest in property and stimulating further growth in the housing market. This trend is particularly expected to remain robust over the coming years in cities like Gurugram, which are witnessing substantial infrastructure development. Gurugram's rapid urbanization and infrastructure projects, such as new highways, metro extensions, and improved public amenities, are making it an attractive destination for homebuyers and investors,” he added.
Manoj Gaur, President of CREDAI NCR and CMD Gaurs Group said, "Even though a marginal reduction in the repo rate would have further raised the real estate sector’s spirit, we welcome RBI’s announcement not to change the interest rate. One area of concern is the affordable housing segment, which requires an intervention. Overall, this is a welcome decision, and the real estate market, with an all-time low unsold stock and experiencing an all-time boom, welcomes this move. The decision supports the growth and stability of the sector.”
Piyush Bothra, Co-Founder and CFO, Square Yards, “Interest rates significantly influence consumer sentiments, particularly affecting the majority of buyers in the low-to-mid segment. The current market upcycle is driven by the premium segment, which is relatively less sensitive to minor interest rate changes. Hence, the central bank's decision to maintain the status quo is a bit disappointing. A reduction in the benchmark rates would have been ideal as it would have given further buoyancy to the real estate market, especially in the low-to-mid segment, and would have helped a lot of first-time home buyers realize their dream of owning a house. Although the FY25 forecast for economic growth has been upwardly revised to 7.2% from 7%, and inflation is expected to remain within the target band of 2-6%, signalling towards a positive macroeconomic scenario that will buoy the homebuyer sentiments. Given the current outlook, we anticipate the demand momentum to remain strong in property markets across all major cities in India.”
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