The low-interest regime of home loans will continue as Reserve Bank of India (RBI) Monetary Policy Committee (MPC) has kept the key benchmark rates unchanged on June 4. ?The low home loan interest rate has been a crucial demand by real estate, and the RBI has helped the sector by maintaining the status quo,? said Pradeep Aggarwal, chairman, ASSOCHAM.
The real estate sector has been severely affected by the second wave of coronavirus pandemic in the last two months. To revive the economy and boost demand, the central bank has maintained repo rate unchanged at 4% and reverse repo rate at 3.35%. The Reserve Bank of India has also decided to maintain ‘accommodative stance’ as long as necessary to mitigate the impact of the COVID-19 pandemic, said Shaktikanta Das, governor, Reserve Bank of India.
“It is the sixth time consequently that RBI has kept the benchmark rates unchanged. While it reflects a response to the COVID-19 pandemic challenges, it is advantage for home loan borrower,? said Niranjan Hiranandani, national president, NAREDCO. ?The floating retail loan rates continues to be at the lowest level over the past two decades and this is likely to continue for some more time,? NAREDCO President added. The floating retail loan rates are directly linked to external benchmark repo rates.
Describing the policy move to be ?positive for homebuyers?, Anuj Puri, chairman of Anarock Properties said, ?The continuation of this low interest rate regime works very well for all borrowers as the environment of high affordability is likely to continue for some more time.?
?It is good to see that Reserve Bank of India is taking relevant initiatives to promote the housing sector. By retaining the interest rates at a decade low makes it the best time to buy a house. So this works two ways,? Saurabh Garg, co-founder and chief business officer of Nobroker.com.
?Firstly, stable and low home loan rates would boost buying sentiment in the real estate sector. Many potential homebuyers have already realized the importance of owning a physical asset. And secondly, it continues to offer a positive outlook for the sector which would eventually promote healthy economic growth,? Garg added.
?Maharashtra has shown that reduction of stamp duty helped the sector significantly. If this can also be done again and if this measure is adopted by more states, it would really help drive more demand,? he further mentioned.
?The low interest rates for the last few months has already given a boost to the real estate sector upticking the demand in the last few quarters and enhancing the confidence of the homebuyers. The decision will help to sustain liquidity for some period as we are already witnessing the derailment of economic momentum due to the second wave of Covid-19 pandemic and lockdowns in different regions,? said Shraddha Kedia-Agarwal — director, Transcon Developers.
Anshuman Magazine, chairman and chief executive officer, India, South-East Asia, Middle East and Africa, CBRE, said the RBI?s accommodative stance will help sustain homebuyer sentiments which were strengthening pre-second wave. ?With the repo rate and reverse repo rate being maintained at a status quo, banks and NBFCs will continue to render loans at reduced rates to homebuyers, thus supporting demand in the realty sector,? he added.
?The banking regulator should announce monetary support to the NHB to revive growth in the real estate sector,? opined Dhruv Agarwala, group chief executive, Housing.com, Makaan.com & Proptiger.
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