The RBI monetary policy committee (MPC) decided to keep the policy repo rate unchanged at 6.50 per cent and other policy rates were also kept unchanged. The central bank has also projected faster growth as well as softer inflation for this fiscal year 2023.
Industry Expert’s opinion;
Vimal Nadar, Head of Research at Colliers India
The RBI, has decided to keep its repo rate unchanged at 6.5%, with its stance at “withdraw of accommodation” and is an encouraging sign. While challenges in geopolitics and the resultant downside risks to growth prevail, the next few months will be critical and will define the course for 2023. It is a positive sign that the headline inflation is moderating, however it continues to remain above RBI’s target and thus remains a monitorable.
The unchanged repo rate is likely to give some breather to homebuyers as the RBI has raised the repo rate by a cumulative 250 basis points since May 2022, thereby pushing up interest rates for homebuyers to 9.5% and above. Given the expected nominal growth in income levels paired with sturdy prices in a cautious economic environment, RBI’s pause on repo rate is a much-needed step to boost real estate sentiment.
Piyush Gupta, MD, Capital Markets & Investment Services at Colliers India
“After six consecutive hikes, RBI MPC’s decision to pause on further increase in rates is a welcome move. With inflationary pressures now taming down, this will bring back focus on growth, credit off-take, consumer spending, Real Estate, Infrastructure and specifically housing sector demand.”
Amit Goyal, CEO, India Sotheby’s International Realty
Despite inflationary pressure and other geopolitical issues, RBI Decision to maintain the status quo on policy rates is good news for home buyers.
Rising home loan interest rates has become a growing concern for both home buyers and supply-side stakeholders. To some extent the higher home loan interest rates have dampened the demand for affordable and mid-segment housing as buyers in these segments are more price-sensitive. While the luxury and high-end segments have not been significantly impacted yet, further increases could have affected the overall industry.
We remain optimistic that inflation will come under control and there will be no further increase in policy rates.
Mr Mohit Jain, Managing Director, Krisumi Corporation
We applaud the RBI’s decision to maintain the current policy rates, as it will prevent any further increase in home loan rates. The higher interest rate on home loan has started pinching borrowers, as it negatively impacts loan eligibility of home buyers. Despite this, there hasn’t been a significant impact on the demand in the housing sector so far as home buyers are aware that it is a passing phase and once inflation comes under control, interest rate will also come down.
Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd. Says on RBI policy review
“The RBI’s choice to leave policy rates unchanged is a significant relief for prospective homebuyers, as well as for supply-side stakeholders. The past three quarters have seen a gradual rise in home loan interest rates, causing a significant impact on borrowers as rates have surged to over 9%, marking a 40-50% increase from their historical low. Any additional policy rate hike could push home loan interest rates even closer to the psychological threshold of 10% per annum, creating a substantial impact on buyer sentiments and affordability.
Given the increase in home loan interest rates, we strongly encourage state governments to provide some relief to homebuyers by offering stamp duty rebates or registration fee waivers. Such measures would help mitigate the financial burden on buyers and make homes more affordable for those looking to buy their home.”
Mr. V Swaminathan, Executive Chairman, Andromeda loans and Apnapaisa.com
The RBI’s choice to keep policy rates unchanged will offer relief to borrowers. We are optimistic that this decision will contribute to stabilizing the economy and curbing inflation in the long run, leading to improved overall financial health for the country.