RBI move to hold rates to keep housing demand afloat, help homebuyer sentiment, say real estate experts

“The decision to keep the policy rates unchanged is particularly beneficial for the real estate sector, as stable interest rates mean that borrowing costs for homebuyers and developers remain constant, encouraging further investments in property. This stability will foster confidence among potential homebuyers, and support ongoing residential sales momentum and boost housing demand, contributing to the sector’s growth,” Baijal said.

Also Read: Realty experts upbeat on buoyant demand in housing as RBI keeps repo rate unchanged

The experts, however, also said that the real estate sector expects a reduction in the benchmark interest rate in future as it will give further impetus to the real estate sector.

Pradeep Aggarwal, founder and chairman of Signature Global (India) Limited, said that the RBI's comprehensive efforts are expected to positively impact the homebuyer sentiment and the overall real estate industry.

“This approach not only supports economic growth but also strengthens confidence in the housing market. However, the anticipation of a good monsoon season may prompt the central bank to lower the interest rates in the coming months. Such a move would likely boost real estate sales momentum and provide potential homebuyers with a favourable opportunity to enter the market,” Aggarwal said.

Similar views were echoed by Dhruv Agarwala, group chief executive of Housing.com and Proptiger.com as he said that the RBI’s decision reflects a prudent balance between inflation control and economic growth.

“However, we anticipate a potential shift in the RBI’s stance during the October policy meeting, with possible rate cuts commencing in December. In the meantime, stable home loan interest rates continue to support robust demand in India’s housing sector. This stability makes borrowing more affordable for potential homebuyers, encouraging real estate investment and contributing significantly to economic growth,” he said.

“The RBI’s decision should be seen in the context of inflation-growth dynamics and the ongoing geopolitical crisis. Any rate hike would have halted the real estate sales momentum which in the past few years have been on an upwards trajectory. Going forward, a reduction in the benchmark interest rate will go a long way in providing a further boost to the real estate sector,” Samir Jasuja, founder and CEO of data analytics firm PropEquity, said.

Aman Sarin, director and CEO of listed developer Anant Raj Limited, also welcomed the move and said that the decision fosters a stable economic environment, which is crucial for sustained development.

“We believe that stable interest rates are particularly beneficial for the real estate sector. When interest rates remain steady, homebuyers can plan their purchases without the uncertainty of potential rate hikes. The cost of borrowings too remains stable, thus, stable cost of construction,” Sarin said.

Manju Yagnik, vice-chairperson of Nahar Group and senior vice-president of NAREDCO Maharashtra, said that the real estate sector will benefit from this stability, leading to increased sales and investments, and ultimately promoting economic growth.

“The RBI's commitment to balancing growth and inflation is commendable, and I believe this approach will boost real estate market sentiment and stimulate long-term investment in the housing market,” she said.