Home loan rates are currently over a decade low, spurring demand in the sector and triggering hope in the industry that the sales momentum would continue
With the Reserve Bank of India (RBI) keeping key policy rates unchanged, in line with expectations, the real estate industry hopes the recovery in demand would continue in the sector.
“Home loan interest rates in India have been the lowest in the past couple of years and this has led to a significant recovery in transactions in all classes of housing - affordable, mid segment and luxury," said Ankush Kaul, President (Sales & Marketing) - Ambience Group. "As the apex bank has kept the rates unchanged, we expect housing demand to continue its upward trajectory in 2021, and the overall positive economic indicators shall further help home buyers to close and finalize."
The RBI on Wednesday kept repo rate unchanged at 4%, while maintaining its accommodative stance in its first bi-monthly monetary policy statement of financial year 2021-22.
After a slump post the outbreak of the pandemic, the real estate sector saw a smart recovery with many consumers moving ahead with their decision to buy a house. Home loan rates are currently over a decade low, spurring demand in the sector and triggering hope in the industry that the sales momentum would continue.
Ram Raheja, director, S Raheja Realty, said “RBI expectedly kept the key rates unchanged and reiterated its accommodative stance on rates to achieve sustainable growth of the economy and its determination for control over inflation. This will continue to further foster the demand for housing. Housing markets have responded well in the past to lower home loan rates, stamp duty reduction and other rebates. With inflation set to be high and economic recovery slow due to surge of covid-19, residential real estate will continue to attract investment as it is a safe-haven asset."
Demand for residential real estate has revived as homebuyers took advantage of the lowest mortgage rates along with realistic pricing and various freebies and options rendered by developers, said Samantak Das, Chief Economist and Head of Research & REIS, JLL India.
"Residential sales in Q1 (Jan-March) 2021 recovered to more than 90% of the volumes witnessed during pre-Covid times across the top 7 cities. The sustained growth in sales presents clear signs of demand and buyer confidence coming back to the market. The recent surge in the spread of the pandemic is likely to impact the home buying sentiment for a few months. However, we believe that overall residential sales are likely to surpass the pre-Covid levels in the coming quarters," Das added.