Realtors' unhappy over RBI's rate hike, see adverse impact on housing sale

Housing sales are likely to be affected post RBI's decision to hike key policy rates as this could lead to increase in interest rate on home loans, according to property developers and consultants.

The Reserve Bank for the second time in two months has raised its benchmark interest rate by 25 basis points on inflationary concerns.

"From a real estate perspective, this hike will negatively impact buyer sentiment with the logical result on quantum of sales," realtors' body NAREDCO President Niranjan Hiranandani said.

Realtors' body CREDAI National President Jaxay Shah said: "Two consecutive hikes in the repo rate partially undo the policies for promoting affordable housing. We urge the government to expedite lowering effective GST on all housing to 8 per cent so as to preserve the growth impulses in real estate."
Realty major DLF's CEO Rajeev Talwar said: "This second consecutive repo hike will push overall interest rates in the economy, which may impact the real estate and consumer goods sector that has just started seeing green shoots."
CBRE's Chairman (India and South East Asia) said: "Most banks are expected to realign their deposit and lending rates following this policy announcement. However, the move is unlikely to impact the real estate sector as most of the home loans are floating in nature and come with 15-20 year tenure. Hence, the rise and fall in interest rates get balanced out during the loan life cycle."
JLL India's CEO and Country Head Ramesh Nair said: "This may be a mental setback for the end users as despite a healthy GDP, lending rates for homes and other desirable goods will move northwards."
Dhruv Agarwala, Group CEO, Proptiger.com, Housing.com and Makaan.com said: With the rates now going up, borrowers can expect a further rise in loan costs after the latest RBI policy and the markets are expected to dip slightly but with the stability, it has achieved in the past, it is expected to recover from the slump eventually."
Noida-based developer ABA Corp Director Amit Modi said: "It is huge blow for real estate sector which is yet to recover from the impacts of demonetisation and the implementation of GST even after a whole year."