Low interest rates to stimulate housing demand
New Delhi: The real estate industry on Friday welcomed the RBI’s decision to keep policy rates unchanged, saying low interest rates will boost home buying sentiment and boost demand, especially during the upcoming festival season.
However, the builders demanded that measures be taken to improve liquidity in the real estate sector. The Reserve Bank of India (RBI) planned to keep interest rates unchanged at an all time high as it chose to support the economic recovery rather than inflation. The reduction in the repo rate by 250 basis points since February 2019 has resulted in a cumulative decrease of 217 basis points in the weighted average lending rate (WALR) on new rupee loans.
Commenting on monetary policy, Credai National Chairman Harsh Vardhan Patodia said: “With the onset of the second wave and the fear of a third wave, the RBI’s cautious decision to keep the repo rate at 4% reflects the continuation of its accommodative position ensuring the lowest borrowing rates to keep companies operating in all sectors. ”
“We are optimistic that home loans will continue to be affordable, thus propelling the growth of the housing segment,” he added. Naredco chairman Niranjan Hiranandani said the low interest rate would increase home buying sentiment and ease the financial cushion to record transactions amid a festive tailwind.