Credai, NAREDCO seek lower repo rate to boost housing demand

01 Jun 2024

Realtors' apex bodies CREDAI and NAREDCO have requested a reduction in the repo rate in the next monetary policy meeting to lower home loan interest rates and enhance demand for residential properties. The Reserve Bank of India (RBI) decided to maintain the current repo rate. Boman Irani, National President, CREDAI, highlighted the country's significant economic growth, driven by contributions from all sectors, including real estate. He pointed to the low CPI at 4.83% in April and other positive macroeconomic indicators as reasons for the RBI to consider a repo rate cut, which could further boost economic development and consumer spending.

G Hari Babu, National President, NAREDCO praised the RBI's decision to maintain the repo rate but emphasised the urgent need for intervention in the affordable housing sector. He suggested that a repo rate reduction in the next MPC meeting would positively impact this segment. Babu noted the real estate sector's strong performance and expressed the industry's and homebuyers' anticipation of further government and RBI support.

Sanjay Dutt, MD & CEO, TATA Realty & Infrastructure, supported the decision to keep the repo rate unchanged given the global economic context. He expects lower interest rates later this year, which could significantly increase housing demand by making home loans more affordable.

Samir Jasuja, CEO & MD, PropEquity, indicated that a policy rate cut might be imminent, given that overall inflation is within the RBI's target range. He stressed that a rate cut would enhance customers' purchasing power, which is crucial given the substantial increase in real estate prices.

Shrinivas Rao, CEO, Vestian, predicted that this might be the last time the RBI maintains the status quo, anticipating a repo rate reduction in the upcoming MPC meeting due to higher kharif production and expected easing of food prices.

Dhruv Agarwala, Group CEO, &, stated that the RBI's cautious approach reflects an acknowledgment of persistent food inflation and strong growth. He noted that while the current decision ensures short-term stability in interest rates for homebuyers, a future repo rate cut is vital for sustained sectoral growth amid rising property prices.

Shishir Baijal, Chairman & Managing Director, Knight Frank India, suggested that an above-normal monsoon could help control food prices, potentially leading the RBI to lower interest rates by the end of 2024, which would particularly benefit the affordable housing segment.

Gauri Tandle, CFO, Ashwin Sheth Group, remarked that the RBI's decision supports both individual homebuyers' aspirations and the broader goals of economic growth and stability. (Source: Business Standard )

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