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RBI has announced a hike in Repo rates for the fifth consecutive time. The difference this time accounts for 35 bps, leading the interest rate from 5.90 to 6.25. RBI has been announcing minimum possible increases in repo rate for the last few months in order to curb the inflation that the country is facing due to global trends. The reasons for increasing rates are the war at trade routes, global recession, increasing prices of raw material costs and various other factors that lead to a direct and indirect hike in prices. Though this hike will impact the home loan interest rates to score higher, the real estate market is expected to stay robust as the sector is believed to offer prominent returns on investment as compared to other industries."The 35 bps repo rate hike will have a prominent impact on loan borrowings, which have witnessed a healthy demand this year. The inflation rates are also taming and we expected that there would be no further hikes as it would cause a dent in the real estate, which has marked a great improvement this year. For the momentum to continue, there needs to be stable loan borrowing rates for investors' benefit, the consistently increasing repo rates could dampen the outflow of money that is being invested in real estate spaces," said Sumit Agarwal, Director, Sales & Leasing, Bhutani Grandthum.Uddhav Poddar, MD, Bhumika Group, said, "With inflation taming down, we were hopeful of no more rate hikes. The present hike in repo rate is beyond the comfort level of the real estate sector. The 0.35 per cent hike will take the repo rate from 5.9 per cent to 6.25 per cent taking the home loan interest rates upwards of 9 per cent. It will increase the cost of servicing loans and for new buyers also increase the cost of real estate. We can only hope that the situation improves and that it turns out to be the last hike.""RBI's step to increase the repo rates by 35 basis points has created a little tough situation for investors as it will bring a hike in loan interest rates. Though it can be dealt with after some time as residential projects have been in massive demand for quite some time now, housing prices will undergo a hike as a result of this announcement. This will somehow be helpful for the realtors to deal with the rising input costs but cost adversely to the homebuyers. The effort by the RBI to reduce inflation is entirely reasonable, but prices for real estate developments will undoubtedly rise in the near future," said Salil Kumar, Director - Marketing & Business Management, CRC Group.The repo rate and the reverse repo rate are continually adjusted by RBI in response to shifting macroeconomic circumstances. All economic sectors are impacted each time the RBI modifies interest rates, albeit in different ways. Some market segments profit from the rate increase while others suffer. Even if this move was designed solely to fight inflation, India may endure economic stagnation by the conclusion of the upcoming fiscal year. This, however, might only happen if the inflation-growth scenario remains the same.Prateek Mittal, IIT Alumni, Executive Director, Sushma Group, said, "A marginal 35 basis point increase in the repo rate is hardly going to make any difference. The current total repo rate is only slightly higher than the pre-pandemic levels, and therefore, We don't see it making any impact on the real estate sector. However, in case the hike ends up achieving the RBI's stated objective of curtailing inflation, it will definitely be good for the country's economy. And what is good for the economy will also leave a positive impact on the sector."Ansh Batra, Director, Buniyad Group, said "The repo rate hike was inevitable but this time RBI has taken a relatively moderate approach by raising it by 35bps which now stands at 6.25 per cent. Earlier, there was an upsurge of 50 basis points in the preceding RBI MPC meetings. Though the approaching intention is correct to ease the inflationary effects which continue to stifle the economy, a proper mechanism needs to be developed to oversee the aftereffects of the hikes, has it been able to achieve the end goals, and how is it impacting the real estate markets. The luxury won't be affected that much. But the mid-housing markets can be seriously impacted as buyers of the segment would again see increased costs of borrowings and loans. It can further diminish the affordability levels of affordable housing homes."Harvinder Sikka, MD, Sikka Group, said, "RBI raises repo rate by 35bps to 6.25 per cent, although the industry was expecting RBI to remain repo rate to the same. The hike is minimal, we believe that the market would get accustomed to it quite soon. RBI's move to curb inflation will somehow definitely cost the economic class of society as this would lead to an increase in the price of projects. Loan interest rates are also set to increase, but the real estate sector is expected to be strong and stable. The demand for residential projects is expected to grow. We believe that the residential segment has been doing exceptionally well in the recent past and it will remain the same in approaching months, as efficient projects await buyers."Existing borrowers may see an increase in EMIs when banks hike interest rates, which will lessen their enthusiasm for buying a home. All loans kinds, including mortgages, auto loans, student loans, personal loans, business loans, credit cards, and anything else along those lines are impacted by the RBI rate increase. Any rate increase has an impact on consumers since it makes it more expensive to borrow money from commercial banks. The average person is discouraged from making unnecessary purchases as a result of greater borrowing costs, which also results in lower consumption of goods and services. This has a significant impact on the supply and demand chains as a result."This is the fifth consecutive rate increase in the last eight months. The 0.35 per cent upsurge raises the repo rate from 5.9 per cent to 6.25 per cent, elevating home loan interest rates to 9%. The current increase in repo rates is beyond the real estate sector's comfort zone. Even though we understand the RBI's concerns, we can only hope that conditions improve, eradicating the need for further hikes," said LC Mittal, Director, Motia Group.Indians prioritise owning a home, and demand for housing has changed from small homes in metro areas to larger homes in the suburbs. Small homeowners' demand for homes is hence anticipated to remain strong despite increasing mortgage rates.This story has been provided by NewsVoir.will not be responsible in any way for the content of this article. (ANI/NewsVoir)( With inputs from ANI )Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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