Developers seek rate cut to boost demand
The Reserve Bank of India (RBI) led by Governor Shaktikanta Das started its three-day monetary policy committee (MPC) meeting on Monday. According to analysts, RBI is expected to maintain status quo as inflation risks persist, however, real estate developers are of the view that a rate cut would be ideal during this festive season to spur demand.
“The RBI should initiate rate cut cycle as housing sales have begun to show signs of a slowdown. The fatigue from homebuyers is not only a result of rising home prices but also high mortgage rates. The RBI must look at ways to reinvigorate the housing momentum to balance the host of concerns that domestically or globally may affect India’s growth story,” Shiwang Suraj, founder and director of property consulting firm InfraMantra, said.
The RBI’s upcoming monetary policy announcement will, as always, have implications on industries and markets. The housing market is especially sensitive to changes in acquisition costs since in India, most home buyers avail home loans. A cut in the repo rate would result in lower interest rates on home loans, which makes EMIs more manageable for borrowers.
“Residential property prices across the top seven cities have collectively seen a 46 per cent jump since 2021. Attractive interest rates can help improve affordability, and this can help catalyse sales,” Anuj Puri, Chairman, Anarock Group, said.
