Housing market concerned about rates
The Real Estate Industry is relieved that the Reserve Bank of India (RBI) has kept its repo rates unchanged at 6.5% as widely expected given the tight credit flow across all sectors of the economy.
From the economic standpoint, a hike in repo rates would have had a direct impact on home loan rates, said Anuj Puri, Chairman – ANAROCK Property Consultants.
High housing loan interest rates are known deterrents to many buyers, especially in the affordable segment where higher interest rates can and do weaken sentiment, he pointed out.
Any move to further discourage customers from availing of bank credit would ultimate exacerbate the liquidity crunch and adversely impact the economy. From that perspective, the unchanged repo rate will at least keep the demand for housing loans at status quo, said Puri.
The RBI obviously needs to maintain an adequate buffer for the economy – especially in light of the massive changes that are likely to come about in the next few months in form of REITs and SPVs.
Also, the NBFC crisis currently shows no signs of relenting, and keeping the repo rates unchanged is definitely in tune with the current market signals, believes Puri.
The recent stand-off between the government and the RBI owing to the NBFC crisis and the apex bank’s endeavour to maintain its autonomy and reserves had caused the industry to watch closely whether the repo rate will increase or remain unchanged, he observed. fiinews.com