RBI Monetary Policy 2024: Reserve Bank of India Governor Shaktikanta Das on Thursday introduced the bi-month-to-month MPC choices amid expectations of continued pause on the important thing rate of interest as inflation stays close to the higher tolerance stage of 6 per cent.
While asserting the selections, Governor Das stated that the RBI has determined to keep up the established order on the important thing lending charge or repo charge and preserve it unchanged at 6.5 per cent.
Impact On Housing Sector
Anuj Puri, chairman, Anarock Group, stated, “With the fundamentals of the Indian economy remaining strong despite all global headwinds and inflation well under control, the RBI once again decided to keep the repo rates unchanged at 6.5%, thus extending the festive bonanza that it gave to the homebuyers in its last two policy announcements. Thus, homebuyers retain their advantage of relatively affordable home loan interest rates.”
Housing Market Trends & Home Loan
Puri added that if present developments are thought of, the housing market has been unstoppable, and unchanged dwelling mortgage charges will assist preserve the general optimistic client sentiments.
“Given that housing prices have risen across the top 7 cities in the last one year, this breather by the RBI is a distinct advantage to homebuyers.”
As per Anarock Research, 2023 noticed common housing costs rise by wherever between 10-24% within the high 7 cities, with Hyderabad recording the best 24% soar. The common costs in these markets stood at approx. Rs7,080 per sq. ft., whereas in 2022 it was approx. Rs 6,150 per sq. ft. – a collective improve of 15%.
“Going forward, we can expect the momentum in housing sales to continue, significantly aided by the unchanged repo rates which will keep home loan interest rates attractive and also signal ongoing robustness of India’s positive economic outlook,” Puri added.
Manoj Gaur, president CREDAI NCR and CMD Gaurs Group, stated, “The real estate sector continues to exhibit a steady demand, the commercial segment is doing exceptionally well, and the country’s economy is growing from strength to strength. The residential segment will maintain the trajectory it took last year. I am sure that the sector will continue to show buoyancy as in the past quarters across the country.”
Manju Yagnik, vice chairperson, Nahar Group and SVP, NAREDCO- Maharashtra, stated contemplating that the macroeconomic circumstances are beneficial and the speed has been held at 6.5% for the previous few quarters, the Indian actual property market and the general economic system would have benefited immensely from a charge discount.
“This action will keep consumer housing costs and mortgage rates higher, and we hope it won’t negatively affect the feelings of prospective homeowners,” Yagnik added.
Ramani Sastri, chairman and MD, Sterling Developers, stated, “The long-term benefits of owning a home have led to sustainable growth in the segment and we see this up-cycle continuing in 2024. Hence, the pause in policy rate augurs well for the residential real estate sector.”
Sastri additionally highlighted that customers are eager to purchase properties as stability and safety are on high of their minds now and the current previous has been a testomony to the truth that dwelling purchaser confidence is at an all-time excessive.
“We will continue to see a multi-fold growth in real estate investments since the real estate market is less volatile than other investment markets and delivers higher returns. As long as the macro fundamentals are stable, demand for real estate will continue to grow. Going forward, there can be a further uptick in demand with a reduction in rates, making it even more enticing for prospective homebuyers and bolstering overall market confidence,” Sastri stated.
Pawan Sharma, MD, Trisol RED, stated, “The fact that the repo rate has not increased in the past year has proven beneficial for the real estate sector in every aspect. This is undoubtedly excellent relief news for both home buyers and investors. Indeed, this will further benefit the market.”
Nayan Raheja from Raheja Developers, stated, “The realty sector welcomes the RBI’s decision to hold the repo rate. This move will foster stability and bolster confidence among stakeholders, including home buyers and investors. However, the repo rate at 6.5% remains at a 4-year high, and a rollback would have boosted the affordable housing segment.”
Pradeep Aggarwal, founder & chairman, Signature Global (India), added, “The decision allows homebuyers to make informed choices, which is expected to result in enhanced demand across all housing segments in line with the country’s overall economic progress.”
Repo Rate Trend
For a yr, the Reserve Bank has saved the quick-time period lending charge or repo charge secure at 6.5 per cent.
The benchmark rate of interest was final raised in February 2023 to six.5 per cent from 6.25 per cent to comprise inflation pushed primarily by international developments.
The MPC is entrusted with the duty of deciding the coverage repo charge to attain the inflation goal, preserving in thoughts the target of progress.
In an off-cycle assembly in May 2022, the MPC raised the coverage charge by 40 foundation factors and it was adopted by charge hikes of various sizes, in every of the 5 subsequent conferences until February 2023. The repo charge was raised by 250 foundation factors cumulatively between May 2022 and February 2023.
The MPC consists of three exterior members and three officers of the RBI.
The exterior members of the panel are Shashanka Bhide, Ashima Goyal, and Jayanth R Varma. Besides Governor Das, the opposite RBI officers in MPC are Rajiv Ranjan (Executive Director) and Michael Debabrata Patra (Deputy Governor).
