RBI | Rate hike by RBI as expected, may further impact affordable housing demand
file photo

Kolkata, Feb 8 (UNI) – The 25 bps rate hike by the Reserve Bank of India (RBI) is much along the expected lines, according to Anuj Puri, Chairman – Anarock Group

 

With repo rates now at 6.5 pc, there could be some repercussions on housing uptake as home loan interest rates will head further north. The rates had already crept up after five consecutive rate hikes over the last one year. This will add to the financial burden on homebuyers as apart from home loan interest rates, property prices have also inched up in the recent past two to three quarters, Puri said.

 

“Given that interest rates may breach the 9.5% mark with today’s hike, we may see some pressure on sales volumes in the affordable and lower mid-range housing segments, which are more cost-conscious. The affordable segment has already been in the doldrums, and adding further to the cost of acquisition obviously does not help,” he said.

 

“That said, the Indian housing market continues to be largely end-user driven – and end-users, unlike investors, focus less on ROI and more on the perceived value of homeownership. Furthermore, commodity prices are now falling and inflation is moderating. As such, we are unlikely to see any hikes in the near future, which will be positive for the housing sector in the times to come,” Puri said.

 

He said the monetary policy impacts real estate demand in several ways. When the central bank raises interest rates, borrowing costs for buying real estate increase, which can reduce demand for housing. Conversely, when interest rates are low, borrowing costs are lower, and demand for real estate may increase. Also, an expansionary monetary policy, which increases the money supply, can lead to increased consumer spending and borrowing, potentially driving up demand for real estate.

 

Finally, confidence in the economy is closely tied to the monetary policy. When the central bank is seen as effectively managing the economy and maintaining stability, it can increase consumer confidence and demand for real estate,” Puri added.

 

Join our Telegramfacebook page and Twitter for every update

 

Eli Bitton, Israeli luxury fashion brand, opens its first flagship store in Delhi

Beams fintech, helps create 2 unicorns in startup ecosystem of India, with combined valuation of $1 billion

“I gave my best considering how sensitive the topic is” says Reshham Sahaani on playing Ayesha in Faraaz

Kashika Kapoor’s these 3 pictures with her pawfect baby will definitely make you fall in love with them

Urvashi Rautela and Sharad Malhotra’s Taubaa Meri Taubaa Song Is The New Heartbreaking Song Of The Year

Leave a comment

Your email address will not be published. Required fields are marked *