RBI monetary policy: Inevitable hike will make homes costlier
The Reserve Bank of India (RBI) has hiked the repo rate by 50 basis points to 5.90% making EMIs of all loans costlier
HYDERABAD: The 50-basis point hike by the Reserve Bank of India was expected, especially since no global economy has hinted towards any kind of moderation, according to Anuj Puri, Chairman of ANAROCK Group, a real estate management company.
Inflation continues to ravage almost all economies, and India is no exception. ANAROCK's recent Consumer sentiment survey also highlighted that at least 61% respondents saw high inflation as a major concern for them, seriously impacting their disposable incomes.
With this repo rate hike, home loans will get dearer soon. This could impact residential sales to some extent during the upcoming festive quarter, particularly in the affordable and mid-range housing segments.
The hike in home loan rates will be in addition to the other increasing costs such as inflationary trends of construction input costs. With the overall acquisition cost increasing further, developers will have to seriously consider doling out targeted offers and discounts to boost sales during the critical festive quarter.
The silver lining is that only when the home loan interest rates breach the 9.5% mark will housing sales see a 'High Impact'. If rates remain between 8.5-9%, the impact is expected to be moderate.