June 10, 2022 C.W. Team
On Wednesday, the RBI raised the policy rate by 50 basis points. The RBI’s decision to raise the benchmark interest rate to make home loans more expensive and could affect home sales, in the affordable and middle-income segments.
Real estate advisory firms such as India Sotheby’s International Realty, Anarock, JLL India, Knight Frank India, Colliers India and Investors Clinic said the move was set to curb inflation and would lead to higher interest rates on home loans. Anarock Chairman Anuj Puri said the rate hike will raise interest rates on home loans, which were already rising after the surprise monetary policy announcement in May. Interest rates will remain below those of the 2008 global financial crisis, which were 12% and above. The current increase will affect residential sales volumes over the coming months, with the affordable and mid-range segments. The housing market continues to be largely end-user driven. According to Puri, the rise in the repo rate was inevitable. They are now entering the red zone and any future rise will affect home sales. Colliers India CEO Ramesh Nair expects banks to pass on this repo rate hike in the form of higher mortgage lending rates in the coming months. He advised buyers to make the most of prevailing home loan rates as house prices are expected to rise.Source of images