RBI rate hike will not impact real estate sector: Godrej

The Reserve Bank's decision to raise key short-term rates will not have any impact on the realty sector, a top industry player said.

"Presently, in the real estate sector, demand is exceeding supply, so I see no problem," Godrej Group Chairman Adi Godrej told reporters at an event organised by the Gujarat Institute of Housing and Estate Developers (GIHED) here.

In its first mid-quarter review of monetary policy, the RBI had raised the key short-term lending (repo) rate by 25 basis points and the borrowing (reverse repo) rate by 50 basis points to 6 per cent and 5 per cent, respectively.

The rate hikes are aimed at combating inflation, which stands at 8.5 per cent as per the new WPI series, he said.

The rate hikes will also not impact credit flow adversely, the industrialist said. "Credit is available and I don't see this RBI decision having any effect on credit availability," he added.

On the consumer durables segment, he said, the sector is growing by 25-30 per cent and will grow further during the festive season.

Asked if prices of some products were likely to rise going forward, Godrej said the prices of some products, like soap, could see northward movement due to a rise in raw materials costs.

"(Prices of) some products like soap may go up in the region of 5 per cent as cost of raw materials like vegetable oils has gone up," he said.