As RBI kept repo rate unchanged at 6.5%, it will impact on various sector in different ways, lets see how experts decode RBI move.
The status quo maintained by the Reserve Bank of India (RBI) on policy rate at 6.5 per cent is on expected lines, while growth has been revised upwards to 7.2 per cent for the financial year 2024-25 from 7 per cent, experts said on Friday.
Realtors said the decision to keep the repo rate unchanged in the latest monetary policy review is expected to have a stabilising effect on the real estate sector.
The Monetary Policy Committee, consisting of three RBI and an equal number of external members, kept the repo rate unchanged at 6.50 per cent for an eighth straight policy meeting and stuck to its relatively hawkish stance of “withdrawal of accommodation”, Reserve Bank of India Governor Shaktikanta Das said in his statement.
Experts React On RBI Repo Rate Decision
Vikas Garg, Joint Managing Director, Ganga Realty, welcomed RBI’s balanced approach by maintaining the status quo. He said, “While a niche contemplation on a probable reduction of the repo rate has been propounded by experts, in which case, would be favorable for the real estate and ancillary industries, we respect RBI’s balanced approach toward monetary policy and its decision to keep the repo rate unchanged at 6.5% to combat retail inflation. The luxury housing segment is witnessing insurmountable growth which is so far unfazed by the decision to keep the repo rate unchanged. Housing demand is expected to remain buoyant for most, but the aspirations of home buying might remain elusive for affordable housing buyers waiting for the repo rates to be lowered to engage in property buying activities.’’
Saransh Trehan, Managing Director, Trehan Group, also welcomed the RBI decision and explained how it will impact the real estate sector. He said, ‘’the RBI’s decision to keep the repo rate steady is directly attuned to its mission of cutting back retail inflation and achieving the GDP projection of 7.2% for FY 25. We welcome the RBI’s announcement to maintain the repo rate’s status quo and wish that the balanced approach brings scalable results. In the purview of real estate demand, the home-buying appetite has soared in the past few years, with luxury housing markets profoundly witnessing a demand upshift, despite successive maintenance of repo rates. While high-end home buyers continue to indulge in real estate investments, mid-segment, and affordable property buyers might take a sabbatical due to high home loan mortgage rates induced because of unchanged repo rates.’’
Dushyant Singh, Director, Orion One 32, spoke about demand for housing loans and thereby its impact on real estate. He added, ‘’ Demand for housing will continue to witness an all-spectrum growth. While we would have been jubilant had the RBI inclined towards the reduction in repo rates, we respect its decision to keep the repo rates unchanged to tackle retail inflation. By maintaining stable interest rates, the central bank seeks to provide stability and encourage banks to offer competitive home loan packages, thus revitalizing the housing market. This strategic move is anticipated to inject positivity into the real estate sector, benefiting both developers and prospective homeowners. While the decision aims to stimulate housing demand, it also recognizes the importance of cautious progress amidst inflationary pressures. This careful approach to borrowing rates is designed to benefit potential homebuyers by ensuring affordability and sustaining momentum in the real estate market.’’
Equirus Economist Anitha Rangan said the apex bank in its second monetary policy for the current fiscal “maintained the policy rate at 6.5 per cent as expected and the growth has been revised upwards to 7.2 per cent while keeping inflation unchanged at 4.5 per cent for the full fiscal”.
“Overall, the key reason for keeping the policy rate unchanged is the uncertainty on the outlook of domestic inflation led by the food basket,” the economist said.
(With Inputs From PTI)