Stable interest rates to bring predictability for homebuyers and developers: Real Estate Industry

New Delhi [India], December 6 : The real estate industry players and other stakeholders have largely welcomed the Reserve Bank of India's (RBI) decision to maintain the repo rate at 6.5 per cent, adding that the stability in the policy rate will promote market confidence by giving developers and homeowners.
On Friday, RBIs MPC decided to keep the repo rate unchanged at 6.5 per cent for the 11th consecutive period, marking a continuation of its neutral monetary policy stance.
However, the RBI announced to cut the cash Reserve Ratio or CRR by 50 basis points from 4.5 per cent to 4 per cent. This will infuse Rs 1.16 lakh crore of liquidity in the banking system.
Anshuman Magazine, Chairman and CEO - India, South-East Asia, Middle East and Africa, CBRE, emphasized the importance of this decision, stating, "Stable interest rates provide much-needed predictability for homebuyers and developers, fostering market confidence."
Other players from the real estate Industry too echoed this sentiment. Harsh Gupta, CEO of Sundream Group, highlighted the direct benefits for homebuyers: "The RBI's decision to keep the repo rate steady at 6.5 per cent provides a much-needed stability to the real estate market. This consistency ensures home loan interest rates remain manageable, which is crucial for sustaining demand in the residential segment."
The outlook was further supported by Vimal Nadar, Head of Research at Colliers India, who noted, "Stable repo rate translates into stability in interest rates and augurs well for the Indian real estate sector. Housing sales across major cities of the country are likely to end on a strong note in 2024."
The ripple effects of this decision extend beyond metropolitan areas. Piyush Kansal, Executive Director of Royale Estate Group, said, "This stability continues to create supportive growth for both buyers and developers, encouraging greater investments. The decision is also in line with the sector's growth in tier 2 and 3 cities."
Focusing on the luxury housing segment, Manit Sethi, Director at Excentia Infra, said, "as luxury housing gains momentum in tier 2 cities, this steadiness will stabilize the loan rates and sustain buyers' interest in the sector. On the other hand, the decision to cut CRR by 50bp will facilitate liquidity in the market."
Rajeev Radhakrishnan, CIO - Fixed Income, SBI Mutual Fund anticipated that in the near term we could anticipate other fine tuning of liquidity measures such as repo auctions apart from screen-based OMO in case core liquidity tightens further.
" Given the Q2FY26 CPI projections, in the absence of any incremental inflation shocks, the Feb review could be live for a repo rate reduction," he added.