Contrary to expectations, the Reserve Bank of India (RBI) raised the repo rate by 25 basis points to 6.5% in its bi-monthly policy meeting today. This is the second consecutive increase in the last 3 months as the central bank had earlier increased the repo rates by 25 bps in June 2018. This hike was well expected amidst several long-standing risks that are resulting in inflation, such as higher oil prices, global financial market volatility, and an increase in minimum support prices (MSPs) for agricultural crops. With the previous rise in the repo rate in June, various banks such as SBI, PNB and ICICI Bank increased their benchmark lending rates by up to 0.1 per cent, making loans costlier for consumers, while housing finance company HDFC Ltd revised the prime lending rate by 10 bps. With the recent upward revision in the repo rate, banks are likely to make an additional increase in their benchmark lending rates. How will the increase in lending rates impact the housing sales in the country? \u201cIn our opinion, this should have minimal influence on home sales in Indian cities which are witnessing a slow recovery in 2018, after experiencing a downward trend and high unsold inventory over the past few years. The affordable housing sector in H1 2018 especially drove the residential market and the trend is likely to continue over the coming years as the home loan rates for the sector is at an all-time low and interest rate subsidies are available under Pradhan Mantri Awas Yojna (PMAY) for Economically Weaker Section (EWS) and Middle Income Group (MIG) I & II,\u201d says Surabhi Arora, Senior Associate Director-Research at Colliers International India. However, \u201cwe reiterate our advice for buyers looking for a home loan to avoid waiting any more as banks may increase the rates further, post the hike in the repo rate. For the existing borrowers, the EMI burden will only increase as banks have already started increasing interest rates,\u201d advises Arora. Anupam Rastogi, Principal Partner, Square Yards, also has similar view. \u201cHaving increased the repo rate twice by 25 bps each time in the past three months, the RBI has signaled clearly that the home loans are going to be costlier in the months to come. On a positive note, homebuyers can off-set this hike in interest costs by availing of the deals which are currently at their disposal. Today, developers are more flexible and one can find out value-for-money deals which may not last for long as the real estate market too is showing some signs of revival. I think homebuyers should jump the gun now,\u201d he says.