CREDAI, NAREDCO urge RBI to cut interest rate in June policy to boost housing demand

New Delhi, Apr 5 (PTI) Realtors' bodies CREDAI and NAREDCO on Friday urged the RBI to reduce repo rate in the next monetary policy as lower interest rates on home loans will give a further fillip to demand for residential properties.

The Reserve Bank of India on Friday kept the benchmark interest rates unchanged at 6.5 per cent for the seventh time in a row, citing concerns over food inflation in view of IMD's prediction of above normal maximum temperatures during April to June.

The next meeting of the MPC is scheduled during June 5 to 7, 2024.

As the RBI has held key policy rates steady, the EMIs on home and auto loans are likely to remain stable for some more time.

CREDAI President Boman Irani said, "The central bank maintains the repo rate at 6.5 per cent continuing a hawkish stance to keep inflation under check. However, with repo rates being an industry agnostic subject, we hope to see lower repo/interest rates later this year which will provide an impetus to not just real estate and housing demand but across industries - compounding sectoral and economic growth." NAREDCO National President G Hari Babu said the RBI's decision to maintain the repo rate underscores confidence in the nation's economic fundamentals, setting an encouraging tone for the new financial year.

"While the current interest rate remains at its highest in four years, we urge the RBI to consider our appeal in its forthcoming review meeting," he said.

Commenting on the central bank policy, real estate consultant Anarock Chairman Anuj Puri said the RBI's decision is on the expected lines.

"The Indian economy is going strong and inflation is reined in, though it has yet to come within the threshold of RBI's target. The decision to maintain the status quo will keep the ongoing residential real estate sales momentum on course and unimpeded. Aspiring homebuyers eyeing a purchase will proceed with confidence," Puri said.

Housing.com CEO Dhruv Agarwala said, "The RBI leaving the repo rate unchanged for the seventh time in a row amid improving growth numbers and moderating inflation augurs well for the real estate sector in India. Not only would this reflect in stability in housing loans but also in property prices since the cost of borrowing would remain stable for developers as well." Property consultant Vestian CEO Shrinivas Rao said, "Stable repo rates for more than a year have brought certainty into the real estate market. However, rate cuts are expected in the second half of 2024 if the inflation falls under the upper limit of 4 per cent, set by RBI." Real estate developers hailed the decision to maintain stability in the interest rate regime but demanded a reduction in the upcoming policy.

Eros Group Director Avneesh Sood said, "With stable interest rates, homebuyers can proceed with assurance, fostering sustained development in the housing market." Ambience Group chief business officer Ankush Kaul said, "The upward trajectory that the real estate sector is sailing on shall continue." This decision will be beneficial for both borrowers as well as developers bringing an equilibrium in financial volatility, he added.

Nayan Raheja, Promoter of Raheja Developers, said the RBI's decision will provide some relief to borrowers as their EMIs (equated monthly installments) will not rise.

Mumbai-based Tribeca Developers' CEO Rajat Khandelwal said, "The continued liquidity and stable lending rates will benefit buyers to upgrade to luxury property in their desired budgets." Aman Trehan, Executive Director of Trehan Iris, described it as a "judicious move" that strikes a balance between controlling inflation and supporting economic growth.

Anurag Goel, Director at Goel Ganga Developments, said the lower cost of funds will revive the demand in the real estate sector.

Shiwang Suraj, Director & Founder of InfraMantra, said this consistency fosters confidence among investors and homebuyers alike, providing a steady environment for sustainable growth and prudent decision-making in the realm of property investments.

Nitin Bavisi, CFO of Ajmera Realty and Infra Ltd, said the decision of the RBI to keep the repo rate unchanged has been reflected as a coveted demand influencer for the real estate sector. PTI MJH SHW