Realtors foresee higher housing prices following RBI rate hike

Realtors foresee higher housing prices following RBI rate hike

New Delhi: Housing prices are likely to go up on account of an expected rise in the developers’ borrowing costs following the Reserve Bank’s decision to hike key interest rates by 25 basis points, but realtors do not foresee demand being dampened during the ensuing festive season.

“Interest rates on home loans as well as on developers’ borrowings are bound to go up. Housing prices, which have gone up by 15-20% in last one year, will further increase as we are not left with no choice but to pass on the same to buyers," Confederation of Real Estate Developers’ Association of India (CREDAI) chairman Pradeep Jain told PTI.

Asked about demand, he said there are no concerns, as buyers understand there is no benefit to putting their decision on hold due to rising property prices.

“The housing prices will rise by 30-50%, depending upon location, once the proposed land acquisition Act is passed by Parliament. So end-user customers know this and therefore, we do not see any adverse impact on housing prices," he said.

Jain said end-user demand during the festive season would remain buoyant, but felt that investor demand could be lower than the last year due to the negative sentiment.