Rate increase: Developers expect home sales to be hit

Realtors and property consultants said,  the RBI's 0.25% hike, move as being detrimental to the growth of the economy.

Mr. Pradeep Jain, Chairman, CREDAI (Confederation of Real Estate Developers' Association of India):                                                                                                          
 “Time and again it has been expressed that until and unless steps are taken to improve supply system, this increase by RBI is going to have a minimal effect on inflation.”

Mr. Adi Godrej, Chairman, Godrej Group:                                                                                                                                                                                                  "This policy of hiking rates has simply not worked. I think the rupee should not be allowed to depreciate. That adds to inflation."


Mr. Niranjan Hiranandani, MD, Hiranandani:                                                                                                                                                                                             The increase in interest rate will not only dampen the growth of the sector but also result in more unemployment. I am totally against RBI's decision of rate hike. They are destroying growth, which means you are increasing unemployment. Increase in rates by RBI has now crossed a `lakshman rekha' wherein it is destroying growth and any further increase in rates will cause more inflation because it adds to costs."


Mr. Pranab Datta, VP & MD, Knight Frank India:                                                                                                                                                                                            ''The rising inflation rate made a case for further tightening of the key policy rates. As prospective buyers distance themselves from property, the holding capacity of the developers will be impacted further.


Mr. Boman R Irani, Chairman & MD Rustomjee:                                                                                                                                                                                             The first to feel the impact of the rising rates is the consumer.

Mr. Rajeev Talwar, ED, DLF                                                                                                                                                                                                               Housing prices might go up as cost of financing the project would rise. On the demand side, he said, the prospective buyers would be discouraged to buy property with rising EMI on home loans.


 Mr. Pankaj Bajaj, President, CREDAI (NCR)                                                                                                                                                                                                The consecutive interest rate hikes had led to a 40% rise in housing cost even for existing home buyers who had taken home loans.

Mr. B Muthuraman, VP,  Tata Steel, &  Presiden  (CII)                                                                                                                                                                              "At a time when economic policy should focus on the creation of jobs, it is unfortunate that the economy is being forced into a sluggish growth phase. Going by earlier experiences of a policy induced slowdown, it may be difficult to emerge from such a phase. In that case, GDP growth of 8% may not be achievable not only in the current year but also in the forthcoming year. This makes the Planning Commission’s target of achieving an average of 9% growth during the 12th Five Year Plan look increasingly difficult."

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