Unchanged repo rate a festive bonanza for homebuyers: Property Consultants

The Reserve Bank of India on Friday maintained the pause in the repo rate for the fourth consecutive time, which is good news for homebuyers.

According to industry experts, the unchanged repo rate is a festive bonanza for homebuyers and gives them yet another opportunity to make cost-optimized home purchases.

“If we consider the present trends, the overall consumer market looks bullish across sectors, particularly the automobile and housing markets, which in many ways reflect the health of the economy. We are entering the festive quarter with a very strong momentum in housing sales, and unchanged interest rates will act as a major catalyst for growth in the residential market,” said Anuj Puri, Chairman, ANAROCK Group.

As per ANAROCK Research, housing sales across the top 7 cities created a new peak in Q3 2023 (despite the usually slow monsoon quarter) and stood at 1,20,280 units as against over 88,230 units sold in Q3 2022, thus recording 36% yearly growth. Thanks to the stable repo rate and the resultantly stable home loan interest rates, the momentum is likely to continue.

Also Read: RBI keeps repo rate unchanged at 6.5% – What it means for homebuyers?

For prospective homebuyers, the RBI decision carries positive implications, as it implies the likelihood of lower future EMIs. “This move is expected to inspire confidence among those who had hesitated to enter the real estate market, potentially unleashing pent-up demand. Furthermore, the timing aligns favorably with the upcoming festive season in the residential real estate sector. With stable interest rates and the promise of reduced EMIs, the festive season is poised to witness heightened activity in the housing market,” said Garvit Tiwari, Director & Co-Founder, InfraMantra.

Historically, this period has attracted property investments, and the current scenario of favorable lending rates is likely to drive increased participation in the residential real estate sector. Many homebuyers are likley to finalise their home buying decision during the festive season, taking advantage of the repo-rate pause and developer incentives.

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “The RBI’s status quo on the key policy rates is on expected lines. Softening core inflation, improved asset quality in the financial sector and robust earnings growth are signs of positive economic momentum. The upcoming festive season is expected to further drive economic activity across segments — from real estate and FMCG to automobiles, etc. We also anticipate a substantial number of homebuyers to finalise their decisions during the festive season, taking advantage of the repo-rate pause and any developer incentives.”

Saurabh Vohara, CEO and Founder of ALYF, observed, “The unaltered repo rate is a welcome boon for potential homebuyers, providing them with a renewed opportunity to make prudent choices in their home purchases. As we enter the festive quarter, we are riding high on a strong surge in housing sales. The decision to keep interest rates steady will undoubtedly play a crucial role in driving continued growth in the thriving real estate market.”

Some experts feel that the demand for homes will remain strong, especially in the luxury housing segment.

Ashwin Chadha, CEO, India Sotheby’s International Realty, observed, “The RBI’s policy decision aligned closely with predictions, maintaining its ‘pause’ stance and leaving the benchmark lending rate at 6.5%. This steady repo rate is anticipated to foster stability in home loan lending rates, which is encouraging ahead of the festive season, where we expect the demand for homes to remain strong, especially in the luxury segment.”

Apart from homebuyers, the unchanged repo rate also augurs well for real estate in India.

Dhruv Agarwala, Group CEO, Housing.com, Proptiger.com and Makaan.com, said, “The decision of the RBI MPC to maintain a status quo on the repo rate is in line with its growth-focused approach. As the RBI leaves the repo rate unchanged at 6.5% on the expected lines, banks in India will have more leg room to offer homebuyers better incentives during the upcoming festive season. Considering the demand for residential property in the country is at an all-time high right now, this augurs remarkably well for India’s real estate.”