New Delhi: The surprise interest rate hike by Reserve Bank of India (RBI) will not significantly dent property sales, but another widely expected rate hike in April may slow down sales marginally, developers and analysts said on Monday.

The central bank on Friday raised its short-term borrowing and lending rates by 25 basis points each and said the measure was intended to anchor inflationary expectations and check price pressures.

Also Read RBI hikes rates amid price woes

“This is just a signal for the hardening of interest rates. It will have no significant impact on property demand or borrowing costs for developers," said Parsvnath Developers chairman Pradeep Jain.

DLF, Omaxe and Godrej Properties do not see any major impact on home sales, but are wary another round of tightening could impact sales marginally.

“There would be one in April, there could be one in June. Basically, we are not waiting for the RBI policy. That is what would impact (additional hikes), and that is what the market needs to now discount for," said Ambareesh Baliga, vice president of Mumbai brokerage Karvy Stock Broking.

Omaxe chairman Rohtas Goel said prices would remain stable in the next quarter.

Prices in India’s $50 billion property market are up by a third in some key cities from last year’s lows after a series of interest rate cuts and pent-up demand from a large urban middle class revived home sales, prompting at least 15 real estate firms to line up plans for share sales this year.

“Only if the economy moved into higher gear, generating more jobs and higher salaries that the impact of another rate hike on home demand be actually countered," Rajeev Talwar, DLF group executive director, said of the expected hike in April.

Unitech and HDIL had told Reuters last week that any rate hike that translates into a mortgage rate increase of less than 100 bps will not impact home buying in India significantly.

“The overall sentiment is very positive in the market and that’s not going to change. Moreover, property still remains affordable," said R Nagaraju, Unitech’s vice president, corporate planning.

“Assuming that stock market remains stable and RBI increases interest rate by 50 bps, property sales volume will go down in the next quarter, compared to the current, and prices will not go up," said Pranay Vakil, chairman of the global property consultancy firm Knight Frank India said.

After a revival in residential sales in the second-half of last year, property sales have slowed this year due to rise in prices, Vakil said.

Developers said sales in October-December quarter have traditionally been stronger than January-March because of festive season, considered auspicious for purchase of property.

At 2.52 pm BSE Realty index was down 3.45% while the main index was 0.79% lower.