The realty players have said that the RBI’s move to maintain the current policy rate will stimulate growth within the housing market predicting a significant boon for prospective home buyers.
Incidentally, the RBI's Friday decision came days ahead of the auspicious Gudi Padwa (launch of the Hindu calendar year) as the realty players hope to witness higher property transactions.
Prashant Sharma, President of the National Real Estate Development Council (NAREDCO) Maharashtra, attributed a recent surge in home sales to this positive financial environment, bolstered by optimistic consumer sentiment and supportive government policies.
"We foresee an escalation in demand, particularly within the affordable and mid-segment housing markets. This trend is expected to persist, with hopes of a future reduction in the repo rate," Sharma noted.
Anshul Jain, Chief Executive India & SE Asia & APAC Tenant Representation, Cushman & Wakefield said, "RBI’s decision to maintain the repo rate at 6.5 per cent is on expected lines. However, a rate cut, anticipated later this year, would provide a boost to the residential sector, particularly affordable housing. Though the central bank has been showing its deep commitment to bringing the headline inflation down to around 4 per cent, India’s CPI inflation has been stable for a considerable period, and we expect the RBI to capitalize on the prevailing healthy macro-economic climate and implement a rate cut in one of the subsequent MPC meets to boost consumer spending and demand."
Dr Samantak Das, Chief Economist and Head- Research & REIS, India, JLL observed that the RBI's decision to maintain the status quo is a welcome development for the Indian housing market.
"The policy continuity fosters a predictable interest rate environment, which is crucial for both homebuyers and developers. We anticipate sustained demand, especially in the mid-tier and high-income segments. The momentum is slated to continue with the current pause and potential rate cuts in H2 FY25 expected to support the growth cycle in the sector. This scenario would further incentivize buyers on the sidelines and is expected to significantly boost overall market sentiment, pushing residential sales in the top seven markets of India to another historic high of over 3,00,000 units in 2024.’’
India’s residential markets are currently in the midst of a sustained bull run. Sales in the country rose to over 74,000 units in Q1 2024, up 9 per cent from the quarterly run rate of 2023. If controlled inflation persists, the possibility of future rate cuts becomes more realistic. This would lead to increased affordability levels in 2024, which will be second only to 2021 peak affordability levels reported in JLL’s Home Purchase Affordability Index.
Furthermore, Vimal Nadar, Senior Director & Head of Research at Colliers India said for the real estate sector, the decision offers a sense of continuity and predictability. It also provides a solid foundation for future investment and development initiatives.
"Developers and investors can capitalize on the conducive environment to explore new opportunities and drive innovation in the market. Moreover, unchanged lending rates continue to present EMI-dependent buyers with a rational opportunity to fulfil their home-ownership aspirations. With anticipation of rate cuts in the ongoing fiscal year, the momentum in the residential segment is likely to persist," he said.
Dharmendra Raichura, VP Finance at Ashar Group said that RBI's decision extends favourable conditions for potential homebuyers contributing to resilience and vitality in the real estate sector. "Consistent home loan rates enhance consumer confidence, underpinning investment decisions and fostering an environment conducive to sustained development,’’ he said.
© 2024 IANS. All rights reserved.