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The RBI held the repo rates constant at 6.5%, which goes against the grain of prevailing predictions. The affordable and mid-segment homebuyers are especially relieved, as they were worried that the increase in the repo rate would make it even more difficult to purchase properties by using house loans.
Since May 2022, the RBI has increased the repo rate by 250 basis points, resulting in interest rates of 9.5% or higher for homebuyers. Homebuyers will appreciate the RBI’s decision to maintain the repo rates as-it-is.
According to Vimal Nadar, head of research at Colliers India, “The RBI’s decision to maintain its repo rate at 6.5% with a posture of “withdrawal of accommodation” is a positive development.
While geopolitical risks to development and problems remain, the coming months will be crucial in determining the direction of 2023. Although headline inflation is decreasing, it still exceeds the RBI’s target and is therefore still a monitorable indicator.
The high cost of real estate and the high interest rates on mortgages have led many homebuyers to postpone their plans to invest in real estate, according to Anshuman Sharma, president of sales and marketing at the Navraj Group.
Unchanged repo rates may be seen as a sign of hope because they may stimulate pricing rationalisation decisions in the real estate sector. Since the inflation radar has been actively contracting over the past few months, I humbly implore the RBI to consider reducing repo rates.
The CEO and MD of Axon Developers, Ankit Kansal, stated, “In the past, RBI has increased the repo rate over a period of six iterations. This time, it has maintained the same, highlighting strong macroeconomic sentiments and an inflation rate that is within the danger zone.
This would benefit 250 ancillary companies in addition to the real estate sector and millions of Indian homeowners, having a positive ripple effect across all sectors. The RBI has modified its position and paused the repo rate at 6.5%, according to Saransh Trehan, managing director of the Trehan Group.
In the current period, which has witnessed a significant increase in property prices, properties, and bank loan programmes, it is a big relief for home buyers and realtors. The move ensures that there is no justification for a future rise in prices, even if it does not guarantee a fall in the increasing costs of homes.
In order to stabilise market prices and draw a sizable majority of purchasers into investment circles, we expect the RBI will also have a look at decreasing the repo rate.