The Reserve Bank of India retained its repo rate for the 11th straight time s the central bank kept the interest rate unchanged at 6.50 per cent. In his address after the Monetary Policy meeting, RBI Governor Shaktikanta Das harped upon the need for maintaining price stability.
This came to pass after India reported a slowdown in its GDP growth in the 2nd quarter of FY25. The inflation rate also rose to 6.2 per cent, higher than the RBI’s threshold limit.
Amid these developments, major industry talking heads have shared their thoughts on the RBI’s decision. One of the biggest movers of a developing economy, stakeholders of the real estate economy have also reacted to the recent developments.
“Today’s decision to leave the repo rate unchanged indicates the RBI’s intention to foster balanced growth. This, however, has a beneficial effect on developers as it ensures fixed borrowing costs which then leads to improved project execution.”,added Sandeep Mangla, Managing Director, Forteasia Realty Pvt. Ltd.
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‘Home Loan Rates Expected To Be Constant’
Aman Gupta, Director of RPS Group added, “We can see how consistently responsive and focused the RBI’s rather persistent approach in maintaining the repo rate has been for the real estate ecosystem.”
Focusing on home loans, he further added, “With home loan rates expected to be constant, I believe that there is now more positive confidence and expectation in the market. Our research shows that constant rates have already assisted in increasing housing inquiries by a significant 12 per cent in the current quarter.”
With the construction costs having plateaued and the interest rates not fluctuating much, developers are now in a position to work on project execution instead of having to explore finance restructuring. |
‘Fostering Balanced Growth’
“Today’s decision to leave the repo rate unchanged indicates the RBI’s intention to foster balanced growth. This, however, has a beneficial effect on developers as it ensures fixed borrowing costs which then leads to improved project execution.”,added Sandeep Mangla, Managing Director, Forteasia Realty Pvt. Ltd.
Mangla further added, “The decline in the unsold stock has decreased steadily by 18 per cent on a yearly basis so far as markets are settling. This type of rate stability is precisely what the sector requires in order to sustain its rate of growth.”
Goel Ganga Developments’s Anurag Goel spoke about the stabilisation of Home loans. Goel said, “The reef of repo rate being the same presents homebuyers in particular a positive advantage. This has been so due to the stabilization of current home loans rates that stand approximately at 8.5-9 per cent, making EMIs bearable by an average buyer.”
He further added, “Research conducted indicates that the general stabilisation of rates has upped the possible pool of individuals willing to purchase homes by about 15 percent in tier-2 cities. It is important for the country to maintain this policy as it will encourage the development of real estate space in the country.”
Given the importance of real estate in contributing up to 7 percent of India’s GDP, stability in the rates assures perhaps growth in the allied industries too. |
Understanding Peculiarities Of Real Estate Market
Ashish Agarwal’s Enzyme Office Spaces added, “That the repo rates have been maintained points to the RBI’s subtle appreciation of the peculiarities and sensibilities of the real estate market. With the construction costs having plateaued and the interest rates not fluctuating much, developers are now in a position to work on project execution instead of having to explore finance restructuring.”
Agarwal further added, “And we now have statistics emerging that demonstrate a significant improvement in project completion time, with a 22 per cent rise in delivery rates from the previous year.”
Motia Builders Group’s LC Mittal talked about the impact on new projects and said, “At a pivotal time, this policy choice helps maintain stability in the market. Given the importance of real estate in contributing up to 7 percent of India’s GDP, stability in the rates assures perhaps growth in the allied industries too.”
