Housing demands may shoot up with RBI’s reduction in repo rate
The real estate market which is one of the major employment generators has got a fair share from this year’s budget. With the government’s emphasis on affordable housing for all by 2022, the new model tenancy act and boost on infrastructure, it’s just a matter of time before India’s realty market blooms. Experts at Modi Builders, one of the top builders in Hyderabad, are of the view that this will boost the residential real estate market and will possibly reduce the number of unsold inventories.
Further uplifting the market’s sentiments is the recent RBI’s unconventional step in reducing the repo rates by around 35 bps. From over 5.7 percent to an all-time low 5.4, this is the fourth consecutive rate cut this year.
If the banks continue to pass on the benefits to the customers, affordable housing demand may improve especially in tier 1 and tier 2 cities where property price hike isn’t much. In top metro cities where high property price is a graver obstacle than interest rates, the RBI’s step may not make much difference. However, because of the top builders in Hyderabad, the latter remains one of the best destinations in India for residential real estate investment.
Property builders are hoping that the move by RBI would result in lower EMI on housing loan and attract more home buyers. Since real estate is a budget-sensitive sector, it necessitates a reduction in considerable amount of repo rates for the housing demands to shoot up. The rate reduction will also bolster the initiatives the government recently announced for strengthening the real estate sector. For those who had been waiting for the perfect time to invest in a home, this will stimulate them to enter the market, experts at Modi Builders review.
Nabin Patel, Director, DB Realty said,
“The repo rate cut by 35 bps to 5.4 percent comes as an optimistic step for the Indian economy as a whole. This will play a significant role in bringing down the home loan rates and help ease the liquidity crunch in the sector.”
The collective initiatives by the government and the repo rate reduction will hopefully cheer up the builders as well as the buyers in realty sector.