As broadly anticipated, the Reserve Bank of India kept each the repo price and the reverse repo prices unchanged at 4% and 3.35%, respectively, though keeping an accommodative stance in its 1st FY21 meeting on Wednesday.
Commenting on the RBI policy announcement, realty professionals mentioned that with customer inflation nevertheless trending at the upper finish, the RBI intends to maintain an eye on it in the coming months. India is witnessing its worst second wave of COVID-19, thereby raising some uncertainty. On a positive, the true GDP forecast for the FY 2021-22 remains robust at 10.5% in the wake of the vaccination drive that is in complete swing in India.
“While repo rates will remain the same and home loan rates may remain stable, the incentive period for lower rates (starting from 6.7%) expired on March 31. SBI has already reverted to their normal rates and other banks will also follow suit. This may have some impact on the housing demand, especially in Maharashtra where the stamp duty cuts coupled with lowest-ever home loan rates had significantly boosted housing demand. Now, with stamp duty cuts not being extended and benefits of lowest-best home loan rates also being rolled back, we may see some decline in overall sales volumes,” mentioned Anuj Puri, Chairman, ANAROCK Property Consultants.
Some developers, nonetheless, really feel that the RBI selection to maintain the repo price unchanged is understandable at this juncture and will make positive that property loans continue to stay at eye-catching prices, which also augurs properly for property getting sentiment.
“Residential demand is reviving in the pandemic context and this needs to be fostered. A further cut in the key rates would have given a boost to the current demand uptick that we have seen recently. Our country is recovering fast from the Covid-induced slowdown due to revival in domestic consumption – which has greatly benefitted from the benign interest rate regime, infusion of liquidity as well as stable returns of real estate investment compared to other investment instruments,” mentioned Lincoln Bennet Rodrigues, Founder and Chairman, Bennet & Bernard Group, identified for luxury vacation properties in Goa.
The IMF has projected an impressive 12.5% development price for India in 2021, stronger than that of China, which augers properly for the true estate sector as well. “As the economy is gradually opening up and getting back on track to restore the lost momentum, we feel that special attention should be paid to the real estate sector which contributes significantly to the country’s economic growth,” he added.