Real Estate Fraternity Welcomes RBI's Move to Maintain Policy Rates

By : 360 Realtors

16 December, 2020

For the third time in a row, the RBI has decided to keep the repo rates unchanged. This implies that the repo rate would remain at 4.0%, which is the lowest since the year 2000. Due to this, home loan rates would remain attractive and would boost the buyers’ sentiment. The economy is expected to record positive growth in the second half of 2020-21.

Inflation had been growing in the recent months, due to which the maintenance of low repo rates by RBI was expected. The real estate sector had suffered greatly due to the economic problems posed by the COVID-19 pandemic. The first and second halves of the fiscal year had witnessed a contraction of the economy by 23.9% and 7.5% respectively. Naturally, this had reduced the purchasing power of the potential property buyers, resulting in a sharp decline of property sales.

The real estate players have welcomed the RBI’s decision and expect it to benefit them. This is because lower repo rates would reflect in more affordable home loans, making it easier for property buyers to purchase new homes. Moreover, the lower rates would also incentivize the fence sitters, who had been waiting for the property prices to drop.

Apart from the low repo rates, the policy support provided by the government would boost the realty sector as well. The stamp duty charges have also been slashed, including a complete exemption of stamp duty in some cities.  This also would allow the property buyers to save money and result in higher sales. The realty sector has already started to recover in the recent months due to these measures. This recovery is expected to continue in the next quarter, helping the real estate industry bounce back.

The developers themselves are actively trying to provide various incentives as well. These include discounts, cashback offers, flexible payment plans and more. In many cases, the builders have also offered additional benefits like free club membership, parking space, etc. Banks have stepped forward to fund homebuyers and developers as well. The joint efforts of the banks, the government and the developers are expected to bear positive results in the near future. Owing to its status as a key component of the Indian economy, the recovery of real estate would contribute significantly to the GDP of the country & help the economy revive.