India’s realty sector is certainly headed in the right direction. Both residential and commercial properties showed signs of recovery as real estate activity gained momentum. After a lull in the April-June quarter due to a resurgence of the COVID pandemic, the realty market recorded a steady growth in the succeeding quarter.
This steady move towards a positive recovery rate comes on the back of record-low home loan rates and sops offered by realty developers and lending institutions. Recovery rates are expected to accelerate even further as the Reserve Bank of India (RBI) decided to leave the benchmark interest rate unchanged at 4 per cent. This is the eighth consecutive time that India’s Central Bank has decided to leave the interest rate untouched.
Realty developers and experts lauded the move by the RBI, saying that it would promote property sales and housing demands. The RBI decided to maintain the same rates as the economy is still in a relatively fragile state after making recovery post-pandemic. The last revision of repo rates was in May 22, 2020 and since then the Central Bank has chosen to keep the rate unchanged in an effort to revive a stagnant economy. Since then, interest rates have been at an all-time historic low.
Ramesh Nair, CEO, Market Development, Asia, Colliers, welcomed the RBI’s decision, saying, “Several banks have lowered their home loan rates by a stable repo rate since September 2021. Overall, it is a good time for homebuyers who can avail low home loan rates, along with steady prices.”
Anarock Group Chairman, Anuj Puri, was also all praise for the Central Bank’s actions. “As expected, the RBI maintained the monetary policy pause, keeping the repo rate unchanged at 4 percent and the reverse repo rate at 3.35 percent. In short, for homebuyers, the low home loan interest rate regime will continue in the market and help foster housing demand during the festive season,” he asserted.
Although it is too early to say if RBI’s policy of leaving the rate unchanged will lead to better results, previous numbers have indicated that the realty market is indeed on the up. Nevertheless, one must remain wary of the impending third wave and take decisions accordingly. As the saying goes, ‘Make hay while the sun shines’.