What Realtors Said On Repo Rate Hike

Housing sales are likely to be hit, especially in affordable and mid-income categories, following the RBI's decision to hike repo rate, according to real estate developers and consultants..However, the impact of RBI's decision to raise the benchmark lending rate by 50 basis points to 5.40 per cent is expected to be for a short term, they added..This is the third consecutive rate hike after a 40 basis points and 50 basis points increase in May and June, respectively..In all, the RBI has raised benchmark lending rate by 1.40 percentage points since May this year.."A hike by 50 basis points is definitely on the higher side, and home loan lending rates will now edge further into the red zone," real estate consultant Anarock Chairman Anuj Puri said..This finally marks the end of the all-time best low-interest rates regime, one of the major factors that drove housing sales across the country since the pandemic, he added.."This whammy comes along with the inflationary trends of primary raw materials, including cement, steel, labour, etc., that have recently led to a rise in property prices. Together, these factors - rising home loan rates and construction costs - will impact residential sales that did reasonably well in the first half of 2022," Mr Puri said..Colliers India CEO Ramesh Nair said several banks have already begun hiking home loan rates and this trend is expected to continue.."...the higher home loan rates could dent homebuyers' sentiments, especially in the affordable to mid category. However, we do not see a significant impact on the high-end and luxury segments due to the higher home loan rates," he said..Knight Frank India CMD Shishir Baijal said the third subsequent rate increase will mean a deterioration of affordability and may impact the sentiments of homebuyers.."With the cumulative rate hike until today, assuming complete transmission, a prospective homebuyers' affordability shrinks by around 11 per cent i.e. from an ability of purchasing a house of Rs 1 crore value shrinking to Rs 89 lakh now," he said..Samantak Das, Head of Research and Chief Economist, JLL India, said the likely transmission of another 30-40 basis points increase in home loan rates might cause some mid-cycle slowdown for the residential sector.."This could see some short-term disruption to the sales growth momentum. It is however a note of caution and not a reflection of the overall residential sector's health, with the medium to long-term growth prospects remaining intact," he said..Ramani Sastri - Chairman & MD of Bengaluru-based Sterling Developers, said the RBI move might have an immediate impact on home buying for a short term.."Rising interest rates along with elevated property construction cost and product price pressures could adversely impact the real estate sentiment when buyers are likely to invest in their dream homes foreseeing the festive season," he said..Honeyy Katiyal, Founder of brokerage firm Investors Clinic, said an upward revision will obviously impact the sentiments of homebuyers..Amit Goyal, CEO, India Sotheby's International Realty, said: "Home loan rates are now expected to settle around 8 per cent per annum, which can put a short-term psychological dent on the demand for the mid and affordable housing segment, but we won't see that continuing for long." However, Goyal said the interest rate is still in the comfort zone of single-digit.."With pent-up demand for housing post-COVID, strong economic growth and a steady job market, we expect the demand momentum to continue in India's residential housing segment, especially in the top 6 cities, where office leasing and absorption has been strong," he said..Manoj Gaur, President of CREDAI NCR, said there would not be "much impact" on the consumer sentiments which remains buoyant at present..Nayan Raheja of Raheja Developers said: "Though it might pinch the property markets in the start, it won't have any lasting impact." The impact of rate hike will be predominantly on the affordable housing side, which is primarily driven by sentiments and especially first-time homebuyers who are heavily reliant on home loans, said Lincoln Bennet Rodrigues, Chairman & Founder of Goa-based The Bennet and Bernard Company. .(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)

What Realtors Said On Repo Rate Hike

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