Construction Industry News
For the fourth time in a row, the RBI monetary policy panel raised repo and interest rates by 35 basis points to 6.25 percent to fight inflation. This sudden spike could have an unplanned effect on several business segments, even though these measures are essential to address inflation. Here are some candid reactions from the real estate industry to the recent rise.
“RBI rate hikes will not significantly impact buying sentiment. However, the central bank is in the process of raising interest rates to tame rising inflationary pressures. Understanding this, even homebuyers are aware that these rates were transient and unsustainable. They expected the walk and so are prepared for it. Several banks have already started passing on the burden to borrowers of home loans. We expect demand to continue as the need to own a home is paramount these days. 2022 favored the luxury housing segment; the home buyers consciously seized the opportunity for festive offers and sealed the deal. Likewise, with consumers confident in the economy, the real estate industry will post a remarkable year-end, setting an example for 2023.”Surendra Hiranandani, CMD, House of Hiranandani
“Following the 35 basis points (bps) increase in the repo rate, we expect the Reserve Bank of India to ease its stance in the coming months as international prices for crude oil and other global commodity prices have corrected from the peak. We will now see a revival in demand in the real estate sector as the uncertainty surrounding interest rate hikes is drawing to a close. We believe that the real estate industry is starting to see a gradual recovery in key real estate markets, mainly driven by end-users.”Amit Jain, CMD, ARKADE Group
“RBI's decision to raise interest rates to address inflation and ensure the recovery of the domestic economy was a good one. The sharp rise in interest rates for the fifth consecutive time will have a short-term effect on homebuyers' sentiment, as low interest rates have been the biggest factor in the rebound in real estate demand over the past two years. We hope the state government will step in again to ease the homebuyer's burden by cutting stamp duty to boost sentiment.
“RBI's decision to raise policy rates for a fifth consecutive time was expected due to high inflation and economic recovery. We have already seen a vertical movement in house prices in recent months that had a minimal impact on housing demand. But this decision will further erode homebuyer sentiment and impact overall demand for a short period of time. Shraddha Kedia-Agarwal, Director, Transcon Developers
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