‘RBI’s 6.5% hike in repo rate bound to impact India’s housing market’
The state’s rebate on stamp duty and circle rate will have some positive impact on the housing market till March: Experts
With the Reserve Bank of India (RBI) raising the repo rate by 25 bps to 6.5 per cent, the real estate industry fears that this will harm the housing industry.
Real estate industry stakeholders in Bengal, however, feel that the state government’s rebate on stamp duty and circle rate will have some positive impact on the housing market till March.
The Monetary Policy Committee of the RBI, on Wednesday, hiked the repo rate in a bid to arrest retail inflation. The real estate industry fears that this hike in repo rate will directly impact home loans and that too at a time when the sector has begun showing promising sales numbers. The present decision by the RBI will lead to higher borrowing costs which could again reduce the demand for home loans.
Commenting on the development, Saket Mohta, MD, Merlin Group, said that with repo rates at 6.5 per cent, the housing market in India is bound to be impacted.
“The global recession has prompted the apex bank to tighten the policy which will have a resultant impact on home loans. Home buyer’s sentiment is going to be hurt and potential buyers may have parked their decision of owning homes aside for some time,” he opined.
Mohta, however, feels that the demand for homes will be there and serious buyers will go ahead to buy.
He further added: “Though the Budget has not given specific sops on tax exemption front, the extension of rebate on stamp duty and circle rate by the West Bengal government will have some positive impact on the housing market till March. Moreover, the luxury residential market is unlikely to be impacted by the repo rate increase.”
Sushil Mohta, chairman, Merlin Group and President CREDAI, West Bengal, recently said that the Union Budget 2023-24 did not mention any sops on increasing the limit of home loan interest deduction on income tax returns and neither did it offer any waivers or reduction of GST on raw materials like cement, steel that would have boosted the real estate segment.
