RBI Monetary Policy Reaction
Anuj Puri, Chairman – ANAROCK Property Consultants
The 25 bps increase in the repo rate announced in today’s third bi-monthly monetary policy was in line with our expectations. Amidst rising inflation, depreciating rupee and other global macroeconomic risks, this increase is fairly justified.
While this may lead to a hike in home loan rates as well, the overall real estate sector now rests on a strong footing and buying decisions may not be altered by these marginal changes.
As per ANAROCK research, nearly 60,800 units were sold in Q2 2018 across the top 7 cities of India, which is a 24% rise over the previous quarter. Amidst a 50% quarterly rise in new launches in Q2 2018 too, unsold inventory reduced by 2% from 7.11 lakh units in Q1 2018 to 7.0 lakh units in Q2 2018.
These numbers clearly indicate that the markets are now recovering from the shocks of structural changes and policy reforms. In fact, genuine home buyers have welcomed these actions which have imbibed the much needed financial discipline, accountability and transparency in the sector.
With lucrative deals on the table, serious end-user demand is back on the market and marginal hikes in home loan rates are unlikely to deter buyers who have been sitting on the fence for some time now, waiting for the right time to seal the deal.