The month of October has given homebuyers more than one reason to be happy. October being a festive month has homebuyers spoiled with limitless offers on a home purchase. From discounts on the property price to attractive freebies, this is the best time to have your share of the benefits that real estate is showering in terms of festive deals.
As the homebuyers were already rushing to grab the best of the festive season, RBI's latest announcement to keep the repo rate unchanged has multiplied their happiness.
RBI Governor, Shaktikanta Das, said while announcing the monetary policy - “Consequently, the policy repo rate remains unchanged at 4% and the stance remains accommodative as long as necessary to revive and sustain growth on a durable basis and continue to mitigate the impact of COVID-19 on the economy while ensuring that inflation remains within the target going forward.”
Breaking down the above statement in simple words - The Reserve Bank of India (RBI) has decided to leave the repo rate unchanged at 4% for the eighth straight time. While the pandemic-hit economy is still in a nascent stage of recovery, RBI attempts to support economic recovery with its latest announcement. The unanimous decision has been taken by the six-member Monetary Policy Committee (MPC) of the RBI as a result of the three-day review meeting headed by RBI Governor Shaktikanta Das.
How will homebuyers benefit from the RBI's decision?
1. RBI's decision to not change the repo rate will continue to keep the home loan interest rates low and thereby, favouring home buyers and the housing demand.
2. The decision will provide stability to various markets along with real estate and provide much-needed liquidity. The business in the Indian real estate sector is at a good pace. This decision will act as a sentiment booster among the homebuyers and further boost demand and sales of residential properties in the ongoing festive season.
3. RBI's stand is a positive indicator for the economy as well as buyers in real estate. Homebuyers will continue to benefit from the low rate of interest. It will encourage demand for housing, especially affordable and mid-segment housing in this festive quarter and upcoming quarters until the next announcement.
4. Such decisions induce optimism and confidence in the minds of homebuyers. Hence, low-interest rates, and positive market sentiment together create a favourable condition during the best homebuying period of the year.
5. This year's housing sales are already performing better than last year. In addition, experts believe that housing demand in the ongoing festive period will result in an impressive rise in sales. It is going to be a good one for the homebuyers across the top 7 cities as well as tier 2 & 3 cities.
6. A lot of first-time homebuyers who were looking forward to buying their dream homes last year couldn't take the step as the pandemic had caused a crisis all over and they were not so confident in investing in real estate. However, the latest announcement on unchanged repo rate further keeping the home loan interest rates low has given them the much-needed confidence.
Also Read: Union Budget Highlights
Real estate experts on RBI’s announcement
Industry experts welcome the move, and they have expressed their thoughts on real estate likely to see a remarkable rise:
Harsh Vardhan Patodia - President, CREDAI - "The RBI’s move of keeping the repo rate at 4% and reverse repo rate at 3.55% is a welcome move. The acknowledgment of taking an accommodative stance while having indicators of economic recovery is a message in the right direction. While inflation has been better than expected with the festive season coming in and RBI keeping rates at status quo we look forward to more support from bankers on home loans to push the festive sales cheer."
Ashok Mohanani - President, NAREDCO Maharashtra - "The economic growth needs to be supported through monetary policy and this is the foremost reason that the RBI has continued its accommodative stance. Also, the interest rates will continue to be at a record low for some time. Therefore, this is the best time to buy a home as it gives the aspiring homebuyers a lifetime opportunity to purchase their dream home with various festive offers as well as all-time low interest rates."
Ramani Sastri - Chairman and MD, Sterling Developers Pvt. Ltd - "This is the right time for prospective homebuyers to invest. The move to reduce interest rates by a few banks recently is encouraging and will pave a path for robust housing demand further. We are seeing a lot of first-time homebuyers, who were not able to reach a decision in the previous quarters due to the lockdown are eager to conclude the deal now."
The proactive stance taken by the RBI has boosted the interest of the end-users. More demand and sale of properties will fuel the growth of the economy, real estate, and all other industries linked with the real estate industry.
Moreover, with the home loan interest rates going at an all-time low, it is a never-seen-before opportunity. Owning the asset called home is indeed one of the cherished goals of life. To those who are living in rented places and seeking the right opportunity to buy a home for themselves, this is the time. With the repo rate remaining unchanged, low-interest rates, affordable property prices, and ongoing festive offers - what better time could you ask for to buy your dream home?
Also Read: Economic Survey
Translate your home buying plans into action immediately!
Repo Rate is the interest rate at which the central bank of a country (Reserve Bank of India in India) lends money to commercial banks. Customarily, commercial banks borrow money from RBI when there is a shortage of funds. Banks repay the amount as per the repo rate applicable. The increase in repo rate takes place when the government intends to control prices and restrict borrowings to the banks. On the other hand, when the government finds it imperative to infuse more money into the market to support economic growth, it reduces the repo rate.