The RBI’s decision to hike the repo rate will have a moderate short-term impact on housing demand on likely rise in home loan interest rates, according to the real estate industry.
With borrowing costs for developers set to rise, many builders said that housing prices might also increase.
On Wednesday, the RBI increased the Repo rate by 35 basis points amid inflationary concern.
Realtors apex body CREDAI President Harsh Vardhan Patodia said: “Any increase in repo rate has a direct impact on the end consumers, including home buyers, as banks will ultimately pass on this increase to customers and this may impact the current momentum in the short term”.
Property consultant Anarock Chairman Anuj Puri said there may be some repercussions on housing sales.
“This hike will undoubtedly push up home loan interest rates, which had already crept up after four consecutive rate hikes this year. However, as long as interest rates remain in single digits the impact on housing will at best be moderate,” he observed.
Sanjay Dutt, MD & CEO of Tata Realty & Infrastructure Ltd, said the RBI move will push the interest rates on home loans. However, he said, the coming quarter of 2022-23 would remain the best time to invest in all segments of real estate, driven by the overall strong talent-driven job markets.
Venkatesh Gopalkrishnan, CEO, Shapoorji Pallonji Real Estate, said: “35 bps repo rate hike by the RBI would be reasonable to address inflation as well as continue the growth of the real estate industry”.
Piyush Gupta, Managing Director, Capital Markets and Investment Services, Colliers India, said affordable and mid-housing are the most sensitive to prices and these segments might see some slowdown in the short term.
“On the real estate side, interest rates on home loans have increased to around 8.5 per cent from 6.5 per cent before May this year, but thankfully we have not seen any impact on housing demand and sales.