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If you are a fence-sitter, you should make up your mind to invest in real estate sooner than later
Real estate sector stakeholders have welcomed the move by the Reserve Bank of India (RBI) to maintain status quo in the policy rate. The affordability factor due to decadal low home loan rates has played a major role in reviving the real estate sector from Covid-19 blues, say developers and consultants.
The RBI has kept the repo rates unchanged at 4% and reverse repo rate at 3.35%. It ensures the home loan rates are unlikely to go up at least till the next quarter.
Expert views
“The unchanged repo rate regime works well for home loan borrowers as the floating retail loan rates, which is directly linked to external benchmark repo rates, have been at the lowest level in the last two decades. The continuation of this low interest rate regime supports the environment of affordability which has become the new hallmark of the housing market – during the pandemic, and even before,” says Anuj Puri, Chairman, ANAROCK Property Consultants.
Pointing out that the homebuyer sentiment has already improved, the continuance of low interest rates will drive people to consider real estate as an investment option. “The decision of the RBI MPC augurs well for the real estate industry in general and home buyers in particular, since the record low interest rate regime would enable a large number of buyers to invest in a secured asset like real estate,” says Vikas Wadhawan, Group CFO, Housing.com.
Calling real estate as a safe-haven asset, Ram Raheja – Director, S Raheja Realty, points out that homebuyers will continue to take advantage of the lowest ever home loan interest rates and with the emerging need, the demand for housing is going to sustain.
Should you buy a home now?
If you are a fence-sitter, you should make up your mind to invest in real estate sooner than later. While there is comfort on home loan rates, other concessions may not stay longer. For example, a proposal has been mooted to raise circle rates in Noida, Greater Noida and along the Yamuna Expressway by as much as 40%. There could additionally be a 5-12.5% surcharge on properties along the Metro route or near the Expressway. The state-specific concessions in stamp duties to support the real estate sector may get discontinued too.
“Customers should take advantage of the current scenario because, in the future, property prices may rise due to higher raw material costs,” says Pradeep Aggarwal, Founder & Chairman, Signature Global Group, Chairman, ASSOCHAM, National Council on Real Estate, Housing and Urban Development.