Continuing low interest rates work best for home loan borrowers as the high affordability environment is likely to continue for some time. As expected, the RBI Monetary Policy Committee on Friday maintained the repo rate unchanged in the wake of the second COVID wave, maintaining its position for the sixth
Industry experts said that if it were not for the pandemic, the Reserve Bank would have taken a different stance on today’s benchmark rates. Given the rising rate of inflation in the country, the Reserve Bank would have sought to raise the key rate.
The economy is still under pressure due to the epidemic, with supply problems, rising inflation and overall consumer slump, which keeps benchmark rates in check. This is the sixth consecutive time that the RBI has changed benchmark rates in response to the need for COVID-
19 pandemic uncertainty.
Lincoln Bennet Rodrigues, Founder and Chairman, Bennet & Bernard Group, said, “Residential demand is reviving in the pandemic context, which needs to be nurtured. However, record low current home loan rates are already attracting homebuyers. For any investor, this is the best opportunity time and the ultimate consumer, the best time to buy. Going forward, we want to reduce stamp duty and registration charges to increase demand in the real estate sector, which is becoming the backbone of many other sectors.”
Some industry experts said the RBI’s move was as expected, but they urged the banking regulator to announce funding for the
NHB to revive growth in the realty sector, while governing agencies should check the prices of key construction materials.
“The Reserve Bank keep the repo rate unchanged at 4% in the monetary policy review is in line with expectations. This is an appropriate thing to do, given the wide range of financial variations of the various lockdowns that states have declared contain the second wave of the virus. However, we
expect the banking regulator to announce funding for the NHB to revive growth in the real estate sector, making it the second largest
employer in India,” said Dhruv Agarwal, Group CEO, Housing.com, Makaan.com, Prop Tiger.com.
“The Reserve Bank of India (RBI) had hoped that the repo rate would remain unchanged due to the risk of inflation. As steel, cement and crude oil prices continue to rise, the pressure of inflation is mounting, and maintaining a favorable position is absolutely optional. Coming into real estate, demand, structural transformations, and a healthy economic outlook will drive the market in a positive direction. However, regulatory agencies should check the prices of key construction materials such as cement and steel. Prices have risen sharply in recent months, and if it is not contained, it will weaken and halt a lot of construction activity,” said Ankit Kansal, Founder & MD, 360 Realtors.