RBI Accommodative Stance Is Encouraging
According to realty experts, the unchanged repo rate at 4 percent may not offer extra benefits to real estate but will augur well for the festival buying cycle and affordability.
Anurag Mathur, CEO Savills India, “As expected, the Monetary Policy Committee of the Reserve Bank has stayed away from changing the benchmark lending rates for the eight consecutive time, keeping it unchanged at 4%. Also, the continued accommodative stance reflects its confidence in progressive opening of the economy and the remarkable progress on the vaccination front. Although the real estate segment does not derive extra benefit from the unchanged rate scenario, the festival buying cycle and rising affordability for home purchases augur well for residential real estate. In this context, it is also worth paying attention that the hon. Supreme Court’s direction for framing of a model builder-buyer agreement and agent-buyer agreements has given a significant boost to consumer-confidence just the week before. Overall, while the buyers would have liked a lowering of home loan rates, which is unlikely right now; the unchanged rate would not affect real estate decisions during the current festive season.”
Harsh Vardhan Patodia – President, CREDAI added, “RBI’s move of keeping the repo rate at 4% and reverse repo rate at 3.55% is a welcome move. The acknowledgment of taking an accommodative stance while having indicators of economic recovery is a message in the right direction. While inflation has been better than expected with the festive season coming in and RBI keeping rates at status quo we look forward to more support from bankers on home loans to push the festive sales cheer.”
Rajan Bandelkar, President, NAREDCO India said “The status quo maintained by the Reserve Bank of India in terms of the repo and the reverse repo rates and the accommodative stance is a very bold and appreciable move. By not toeing the line of its global peers, by tightening the ease of liquidity, the RBI has shown that it is determined to help India sail through the recovery phase and help move towards high growth rate. The move could not have come at a better time and this decision of the RBI’s Monetary Policy Committee is the perfect festive gift for the Indian citizen who wants to have a home of their own. With interest rates already at unprecedented low levels, now it is a great opportunity for the fence-sitting prospective home buyers to fulfill their dream, during the upcoming festive season.”
Sovan Mandal, Chief Executive Officer, Valocity India stated, ‘“The Reserve Bank of India kept key rates and policy stance unchanged, clearly giving priority to growth over inflation concerns. This will help boost economic growth. The central bank’s determination to support higher liquidity in the system augurs well for credit offtake and lending activity. Today’s announcements will provide a greater value to the real estate sector which is already witnessing tremendous growth. The ongoing festive season will provide further fillip to real estate transactions. Numerous government efforts, such as demand stimulation, stamp duty relief in some states, and low-interest rates on house loans are already driving sales demand. The measures announced by the RBI, state, and Union government have helped the sales in the residential segment that are higher than the pre-covid levels. The high number of vaccinations has led to normalization in the office space segment. It is imperative for the regulators to handhold the real estate segment which has a multiplier effect on the economy.”
Vikash Khandelwal, CEO, Eqaro Guarantees on RBI’s MPC announcement expressed, “The central bank kept the key rates and policy stance unchanged for the 8th time in a row thus allaying concerns around a possible unwinding or availability of adequate liquidity. The overall recovery especially in the services and the technology-driven sectors coupled with inflation being well within RBI’s comfort levels helped the central bank stay with the current excess levels of system liquidity. This should help boost economic growth, credit offtake and is a big sentiment booster for the bond market. The ombudsman for NBFCs will help strengthen the grievance redressal mechanism and lead to a speedy resolution.”