The Reserve Bank of India (RBI) kept the repo rate unchanged at 6.50 per cent for fourth time in a row. This has gone down well among the housing market as they have cheered the RBI Governor Shaktikanta Das led Monetary Policy Committee’s (MPC’s) decision to keep the key interest rate unchanged in recently concluded RBI policy meeting. They said that the decision has come as relief for both new borrowers and existing housing loan borrowers. Becuase intrest rate pause means no rise in home loan EMI on both existing home loans and new loans.
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Bonanza for Diwali sales
Reacting to the outcome of RBI monetary policy, Anuj Puri, Chairman at ANAROCK Group said, “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.”
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“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, we can expect the momentum to continue,” Puri added.
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Radheecka Rakesh Garg, Director at Rajdarbar Realty said, “The decision by RBI not to increase the repo rate will catalyse the housing sale in Diwali. Since the festival season is considered an auspicious time in the country to buy a home, it will boost the festive spirit and the realty sector, and we expect massive traction in housing sale in the coming months.”
Expecting push to Diwali home sales after RBI policy outcome, Nayan Raheja of Raheja Developers said, “The housing sector has been performing well for some time, and the RBI’s decision to maintain the status quo has further bolstered the trend. The market is receptive to the current 6.5% repo rate, and the developers have lined up new launches and exciting offers in anticipation of the massive sale. Demand for premium and luxury projects is at an all-time high, and this Diwali, we are expecting record-breaking performance by the housing sector.”
No rise in home loan EMI
On how this would impact home loan EMI of both new and existing home loan borrowers, Pankaj Mathpal, MD & CEO at Optima Money Managers said, “After the rise in repo rate, banks hike interest rate on their retail loans and after the loan interest rate hike, they usually increase tenure of the loan instead of monthly EMI. So, after the rate pause by RBI MPC, there will be no rise in home loan EMI for both new borrowers and existing home loan borrowers.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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Updated: 06 Oct 2023, 01:16 PM IST