Reacting to RBI’s monetary policy and its decision to keep the repo rate unchanged at 6.25 per cent, Shishir Baijal, Chairman & Managing Director, Knight Frank India, said: “Deep down we wished that a rate cut could give the ideal fillip for growth in the residential sector riding on the lower interest rate regime, regulator on the anvil and overall better performance of the economy.”
“The decision to keep the repo rate unchanged is on expected lines because of the liquidity scenario and inching up of inflation,” he added.
Pratik K Mehta, Managing Director, Unishire, a Bengaluru-based real estate developer, said: “The status quo on repo rate will be a dampener for real estate. Input costs are rising and margins are shrinking for developers and affordability is being hit for end-users who might have to pay higher prices for homes with the increase in raw material costs and unless borrowing costs come down, it will be a challenge for buyers to make the investment.”
He further added, “Already the real estate market is affected by the demonetisation effect and sales have slowed down to an all-time low and added to the affordability and higher costs, will make it even more difficult for an end-user to afford a home.”