New Delhi [India], April 9 : The pause in interest rates by the Reserve Bank of India (RBI) is positive for the real estate market, which faced headwinds amid layoffs by large corporates globally, said real estate consultancy firm Anarock.
Anarock's chairman Anuj Puri said India is not decoupled from global economic fundamentals and their invariable impact on the housing markets here in India.
"The RBI's decision to keep the repo rates unchanged comes as a welcome respite to homebuyers," Puri said.
"This particularly gives relief to affordable and mid-segment homebuyers who feared a possible rate hike, making property buying via home loans even harder. As is, affordable housing has been under stress since the pandemic," Puri said.
The affordable housing segment, (units priced lesser than Rs 40 lakh) saw its overall sales share dip between 2019 and 2022 and further in Q1 2023.
ANAROCK Research indicates that back in 2019, out of the total sales of nearly 261,400 units across the top 7 cities nearly 38 per cent of sales were in the affordable segment.
But in 2022, out of the total 364,880 units sold across the top 7 cities altogether, about 26 per cent were in the affordable category, it said.
The Reserve Bank of India, in its first monetary policy review meeting in 2023-24, decided to keep the key benchmark interest rate the repo rate unchanged at 6.5 per cent, to assess the effects of the policy rate tightening done so far.
The central bank conducts six bi-monthly reviews of its monetary policy in a financial year.
Barring Thursday's pause, the RBI has raised the repo rate, the rate at which it lends to banks, by 250 basis points cumulatively since May 2022 in the fight against inflation. It had made real estate assets relatively costlier.
"It bears keeping in mind that after the remarkable performance in Q1 2023, the housing market is now staring at major headwinds with layoffs, rising property prices, etc. which will pose a challenge in the short-term. The respite of home loan rates remaining unchanged is therefore very welcome," Anarock chairman said.
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