Revival in real estate sector may get delayed: Realtors on RBI rate hike

The RBI's decision to hike key interest rates will not have much impact on housing sales, but could delay revival of the sluggish real estate sector, according to property developers and consultants.

NAREDCO's President Niranjan Hiranandani said the hike of 0.25 basis points in the repo rate would not make a major difference to real estate. In the long run, he said,"we would prefer rates coming down.

CREDAI-National President Jaxay Shah said this decision "may lead to suppressed growth in the Indian real estate sector which has shown substantial resilience over the last 18 months."
Anuj Puri, Chairman - ANAROCK Property Consultants, said, "Much to the dismay of several home buyers, the RBI hiked the repo rates by 25 basis points in its latest policy review."
Dhruv Agarwala, Group CEO, Proptiger.com, Housing.com & Makaan.com, said, "With the rates now going up, 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."
Property consultant Cushman & Wakefield India's MD Anshul Jain said, "We foresee an increase in home loan rates not to have a significant impact on sales velocity in the residential market. Serious buyers, especially in an end-user driven market, will continue to scout the market for properties, as the change in actual EMI will not be significant post an upward revision in home loan rates."
"Not only do their cost of funds increase, the rate increase can impact velocity of sales as fence sitters will see this as another reason to postpone their home buying decision."
From developers side, CREDAI's NCR Pankaj Bajaj said, "Real estate sector needs all the help it can to revive the demand, which has been on hold for last 2 or 3 years. We would have been happy if home loan rates had remained unchanged. But 0.25 per cent change in home loan rates is not material to sway the purchase decision of a prospective urban family which is thinking of buying a home."
Bengaluru-based Century Real Estate MD Ravindra Pai said home loans would get costlier. "With the EMI burden passed on to home buyers, the real estate industry will face a setback as it is already experiencing low sales."
Vikas Bhasin, CMD of Saya Group, said, "Even though the apex bank has increased the rates, but we still believe that there is room for financial institutions to cut down on their lending rates for their customers."