RBI MPC Announcement by Mr. Shishir Baijal, Chairman & Managing Director, Knight Frank India for your perusal.
Pause in repo rate hike: Big cheer for the real estate industry!
"Today's pause in the rate hike cycle is a very positive and welcoming move by the RBI. The consumer inflation in the economy has sustained above the RBI's upper threshold of 6% and is more likely to remain sticky in the next few months following the recent crude oil production cut by the OPEC countries and Russia. Consumer inflation arising from such events is beyond the central banks' control. Any further hike in the repo rate and lending rates along with sustained inflation could potentially reduce the spending capacity of the consumers which in turn can dampen India's economic growth. Therefore, the RBI's decision to pause its rate hike cycle is supportive of economic growth. India's economy is expected to grow at 6.5% in FY24; which is an optimistic outlook for the economy amidst ongoing global financial market volatility and economic slowdown anxieties.
From a real estate market perspective, the sector has weathered multiple home loan interest rate increases from a low of 6.5% to 8.75%, supported by favourable house purchase affordability and the strong desire towards home ownership. Therefore, a pause in any further rise in the lending rates should support the existing growth momentum in the housing sector."
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