Maintaining Current Repo Rate will Retain Interest of Buyers in the Real Estate Industry

By : 360 Realtors

27 May, 2022

In order to help the real estate industry maintain organic growth and reduce the risks of inflation, the RBI decided to maintain its status quo on the primary policy rates in the first MPC meet. They decided to carry on with its accommodative stance, which the real estate developers as well as the industry experts have widely welcomed.

The key players in the industry believe that the continuation of the same repo rate at 4% will ensure that the real estate industry would have enough liquidity. This would also go a long way in ensuring better sentiments for the investors. Also, continuing with the same repo rates ensure that the interest rates on home loans would remain low. This would lead to better buyer interest in the residential real estate market. Also, maintaining the same repo rate would give more breathing space to the developers, who are bothered about increasing construction costs.

Although the pressure of inflation is on the rise, the RBI MPC continued to support the economy by maintaining the same repo rates. Besides, they have extended the applicability of loan to value ratio till March 31, 2023. This ensures a higher flow of credit to people applying for home loans. The RBI has acknowledged how important the housing sector, along with the allied industries is to the growth of the economy. The increasing numbers of sales imply that the real estate industry in India is steadily moving forward to embrace a sustained recovery. It has also benefitted from the support policies of the government, which would be helpful for the sector. The RBI governor stated that they have to safeguard the economy in India. This explains why they are taking the necessary measures to ensure a sustained growth of the real estate sector in India. Maintaining the same repo rate is one of the moves that ensures this healthy growth of the Indian economy.