Here’s what real estate developers have to say on repo rate hike

Amit Modi, President of CREDAI Western UP

RBI’s increase in Repo rates by 50 basis points has once again increased the interest rates on loans. This is certainly going to impact the efficiency of buyers, especially the middle-class section of society. After this hike, millions of homebuyers might be sidelined and alienated from the property markets. This will decrease the pace of sales of projects in the real estate market.

Manoj Gaur, President CREDAI NCR

The present repo rate hike of 50 bps by RBI is on expected lines. With this increase the repo rate completes a full circle and is back at the pre-pandemic levels. I don’t think it will have much impact on the consumer sentiments which remains buoyant at present. Housing as well as retail sectors will continue to thrive as the actual increase in home loan interest rates by the banks will be marginal at the best

 

Amarjit Bakshi – CMD – Central Park

In yet another calibrated effort to plummet the inflation rates, RBI has hiked the repo rate by 50 basis points to 5.40%. There is probably conflict of opinions amongst different market experts concerning the possible outcome of the one after the other hike in repo rates. The real estate market does not have much to be worried about. The luxury residential segment has been doing very well owing to positive buyers’ demand, ultimately leading to improved sales. The hike will resolve the compounding outcomes of the inflation scenario on the Indian economy and place it on the track of continuous development.

Nayan Raheja, Raheja Developers

 

Strong institutional action is needed to restore the economic health of the country. RBI has taken a sound approach by increasing the repo rate by another 50 basis points to bring down the inflation rates. Though it might pinch the property markets in the start, it won’t have any lasting impact. The robust customers’ demands and growing income stability have kept the real estate markets in a fairly advantageous position. Prices of residential markets are also not high, and the pressure of input costs has also not been transferred to buyers this time. In a nutshell, the real estate markets have overgrown from the effects of the pandemic. The RBI’s decision to raise the repo rate will help the sector to ward off the deep ends of inflationary challenges and come out stronger.

Yash Miglani, MD, Migsun Group

After reining in the repo rate hike for quite some time to help the country tide over the difficult times due to the pandemic, the RBI has gradually started hiking it by a few basis points. Coming on the heels of a 50-bps hike in the last MPC meeting, RBI has again decided to raise the repo rate by another 50 bps. The increase, in case the banks decide to pass it on to the consumers, will no doubt increase the cost of servicing home loans but its impact, given the projected outlook and the positive sentiments, on the real estate will be minimal.

Ankit Kansal, MD, 360 Realtors

In general, the increase in the REPO rate might not be a welcome step, as the real estate industry has been enjoying a bull run backed by revived demand and reduced home loan rates. However, there is visible turbulence in the international financial markets, which is resulting in inflationary pressure on India and the Central Bank is supposed to take precautionary steps. Across the globe, we have seen central banks increasing repo rates and the recent hike by the RBI is an extension of a larger global phenomenon.

Meanwhile, what is interesting is the overall healthy underlying economic sentiments. Post-pandemic, the Indian economy is poised to grow fast in the coming quarters and this is infusing positive sentiments in the Indian real estate industry as well. In Q1 FY 23, FDIs have improved by 17% compared to the same period last year. The position of the rupee has strengthened and a correction in inflation is visible. The government has also introduced provisions for NRIs to pay their bills and utilities through Bharat Bill Payment System from abroad itself, which is a good step for the housing sector.

Dusyant Singh, Director Orion 132 , Noida

There was a general prescience among the market knowers that the repo rate would see an imminent rise, and much on the line of expectation, the repo rate has been increased by 50 basis points. It is a practically understandable decision to nosedive the inflation rates. The real estate sector is a part of the Indian economy, and a step to bring the economy into a comfortable zone free from the burdens of inflation will be beneficial for the sector as well. Though the property markets might face a jolt in the beginning, overall, the real estate sector will have a smooth run despite the hikes.

Deepak Kapoor, Director, Gulshan group

I hope that the present increase of 50 bps in repo rate by RBI have the intended result of taming the inflation. Even though the government has been making efforts to rein in inflationary pressures on input costs it is still not in the comfort zones. As a real estate developer operating both in the residential and commercial segments, It is going to have a neutral effect on the overall scenario.

Bharat Kumar, Director, Spaze Group

The increase of 50 basis points by RBI was quite expected in the market as per the inflation. However, the concern was regarding the increased loan interest rates, affecting the buyers of real estate. But the announcement has made it quite clear that there would be a minimum increase in rates, keeping the market unchanged as both commercial and residential projects are in high demand. As Covid conditions arise again, financial stability remains the priority of investment, inclining them towards commercial projects, promising high returns on regular basis. The real estate market would remain robust due to the demand for properties.

Uddhav Poddar, MD, Bhumika Group

RBI has announced a hike of 50 basis points, slightly increasing the Repo rates from 4.90 to 5.40, hence RBI has taken a measured approach rather instead of taking any extreme measures to curb the inflation.While this would have an impact on the sale of properties as the potential buyer would rethink or postpone their decisions to buy a home or any other property.   At the same time this would help tame inflation and ultimately benefit the developers as it would help in reduction of input costs.

Shrey Aeren, Managing Director & Country Head of Berkshire Hathaway HomeServices Orenda India

 

50 bps hike in repo rate raises it to 5.4%, which though on the face of it appears marginal and brings it at par with the pre-pandemic levels. However, if the banks follow suit and increase the home loans by the same percentage points it might affect housing sales. In that case a 7.55% interest rate would increase to 8.05% and the borrower would have to pay extra Rs. 1545 every month on a loan of Rs. 50 lakh. Having said that, I hope that the present move leads to a reduction in inflationary pressures on input materials. This would reduce the construction costs and to an extent offset the increase caused due to the repo rate hike.

 

Amit Jain, Director, Mahagun Group

The incremental rise in the repo rate has shown RBI’s commitment to decreasing the inflationary challenges which India is facing on a protracted basis. It would not have much bearing on the real estate sector. Obviously, there will be initial hiccups and shrinks in the market demands. But as there is a remarkable increase in property buying and the market is overflowing with new buyers, the initial challenges will be overcome very easily. Dealing and curbing down inflationary bottlenecks is a major priority right now, and RBI’s line of action is mainly driven by this.

 

Ashwinder R Singh, CEO Residential, Bhartiya Urban

Home loan rates will rise as the repo rate increases another 40 basis points. The weak rupee and rising inflation have sparked this, which would impact property demand, particularly in the 40-75 lac segment. The cushion is that salaries and general household income have been on the rise, and developers have not passed on the entire increase in input prices to consumers. However, second and upgrade home purchasers may exercise caution, and this may lead to an increase in unsold inventory levels with maximum impact on the under-construction property.

 

Prateek Mittal, Executive Director, Sushma Group

In an effort to curb inflation, RBI has revised the Repo rate and increased it by 50 basis points, from 4.90% to 5.40%. This will increase the interest rate of loans but is an excellent measure to tackle the input costs for developers. Talking about the real estate sector, it is not a major concern as residential and luxury projects are already experiencing massive demand due to the buyers’ economic efficiency. There would be a barely minimum impact on the sale of such projects. In all, it is a positive step by the organisation that would be beneficial in the long run.

 

Kushagr Ansal, Director Ansal Housing

The repo rate hike of 50 BPS by RBI is yet another reformative action taken by the top institution to clamp down the inflation rates. Stabilising the macro and micro economic conditions is the main prerogative. It was an astutely measured decision to power up the economic prospects, and the praiseworthy thing is that they did not resort to any flip-flops. It might have a vague impact on the real estate sector but will surely not affect customer confidence.

Ansh Batra, Director, Buniyad Group

“The persistent inflationary straits have necessitated RBI to raise the repo rate by 50 basis points yet again. The Indian economy is tattered by the sloppy effects of tight inflation and can only be managed by concerted institutional policies. RBI has shown its proactiveness in building a strong net to tumble down the inflation rates and also cord off the market pressures. Although the real estate markets on a macro level will witness initial jerks and bumps as a result of increased home loan rates, it is far from hitting a roadblock owing to the renewed market interests. Moreover, the RBI decision has hit the main issue, and the subsidiary challenges will cool off with time.

LC Mittal, Director, Motia Group

The increase of 50 basis points by RBI is not a welcoming decision but would lead to positive outcomes after a short span of time. Incurring the input costs, the developers would be able to create more efficient projects, inviting significant investments. The minor increase in rates would hardly impact the buying capacity as the real estate sector is experiencing massive demand for projects by buyers from every genre, including plots or built-up projects from the residential theme and retail and office spaces from the commercial segment in the past few years.

Shubham Sardana, Director, ElitePRO

Although there might be diverse reactions to RBI’s decision, the increase in the repo rate is a well-thought-out and foreseen measure in a series of attempts to solve the economic lull and inflationary problems. On the other hand, the real estate sector has witnessed bullish growth in recent times, surging from the hues of the pandemic. Backed by the strong buyers’ demands and positive market growth parameters, the real estate sector is unlikely to be impacted by this development. There might be a few crunches at the start, it will not have a long-lasting implications.

Sanjay Sharma, Director, SKA Group

Even though the real estate sector would have liked the repo rate to remain unchanged but the ground level reality dictates otherwise. By hiking repo rate by 50 bps RBI has taken a conservative approach besides trying to do a fine balancing act. I would like to thank the RBI for keeping the hike at moderate levels. As far as the impact on the sector is concerned, I think that it will be minimal as the real estate future looks buoyant.

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