In a bid to sustain economic growth and mitigate inflation risks, the RBI in its first MPC meet for FY 2022-23 on Friday maintained status quo on key policy rates and decided to continue with its accommodative policy stance, which was widely welcomed by industry experts and real estate developers.
Welcoming the RBI move, Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE and Chairman, CII Northern Region, said, “Given the global headwinds, we welcome the RBI’s continuation of accommodative stance as well as its decision to maintain the repo rate at 4% as it will ensure liquidity in the country which will further pump up investor sentiments. The continuation of the current repo rate regime would ensure that home loan rates remain low, leading to continued buyer interest in the residential sector. This would come as a breather for developers who are facing rising construction costs.”
Dhruv Agarwala, Group CEO, Housing.com, Makaan.com & PropTiger.com, said, “Despite inflationary pressures increasing, the RBI MPC has continued with its supportive approach to the economy and maintained a status quo on key lending rates in today’s policy review. Also, by extending the applicability of LTV (Loan to Value) ratio till 31st March 2023, which will facilitate higher credit flow for individual housing loans, the RBI has recognised the importance of the housing sector and its multiplier effects on the economy. Sales numbers indicate that India’s real estate sector is steadily marching towards a more sustained recovery and support policies like these will help that further. Like the RBI governor said in his statement, no action is off the table when the need of the hour is to safeguard the Indian economy.”
“The Indian real estate is set for a robust rebound in FY 23, with sales expected to soar in most of the major markets in the country alongside smaller cities and towns. The industry has leveraged a low home loan rates regime over the past 2 years, and the RBI decision to keep the repo rate unchanged further underscores its commitment to support the economy and the sector. We welcome the step by RBI and expect the government to keep supporting the industry through policy interventions,” said Ankit Kansal, Founder and MD, 360 Realtors.
Developers feel that the RBI move to keep the repo rate unchanged will persuade buyers to buy properties and also bring new investors and stakeholders to the markets.
Amit Modi, Director, ABA Corp and President-elect, CREDAI Western UP, observed, “Despite current inflationary challenges, the RBI announced that the repo rates will remain the same, which is a positive development for the real estate sector. It is currently on the path to recovery and the RBI decision will make the process swifter and easier. It will also be advantageous for the economy, persuade buyers to buy properties and bring new investors and stakeholders to the markets.”
“The fact that the RBI has kept the repo rate unchanged for the 11th time will be favorable to the real estate sector as it will be playing a significant role in the recovery part for the sector. The RBI’s accommodating approach will also help to promote the economy and create a positive environment for all stakeholders. We must remember that this industry does not operate in isolation and is dependent on the success of all related industries,” said Rajat Goel, Joint Managing Director, MRG World.
Amit Jain, Director, Mahagun Group, said, “For the 11th time, the RBI has kept the repo rate unchanged which will bring favourable outcomes to the real estate sector and accelerates its recovery mode. The RBI’s understanding approach will help in economic revival and tackling challenges. The real estate sector will be hugely benefitted from the unchanged repo rate as the move will encourage a huge influx of buyers to invest in properties.”
Uddhav Poddar, MD, Bhumika Group, said, “Keeping the repo rate unchanged in the current high inflation situation shows the government’s commitment towards industry and growth. It is a definite positive for the real estate sector and will boost the economic recovery and create a conducive atmosphere for growth and increased investments.”
It may be noted that given the ongoing conflict in Eastern Europe, high international crude oil prices and rising domestic consumer inflation in recent months, the first MPC meeting of FY23 was closely being tracked by economists and industry experts, apart from developers.
“The accommodative stance and unchanged benchmark lending rates reflect the RBI’s confidence in strong fundamentals of the Indian economy. However, the governor has indicated towards a withdrawal of accommodation in future to keep inflation within the tolerance levels. Furthermore, the real GDP growth rate for FY23 has been projected at 7.2%,” said Anurag Mathur, CEO, Savills India.
“On the real estate front, recent clarity with respect to FDI permissibility in rent or income on lease of a property, not amounting to transfer, was encouraging for institutional investors especially in the commercial office segment. Meanwhile, as employees of India Inc. return to working physically from offices in increasing numbers, H1 2022 is expected to witness significant traction in leasing activity across major cities of the country,” Mathur added.