Expectation on RBI Monetary Policy|| Signature Global (India) Ltd|| Colliers India

Expectation on RBI Monetary Policy|| Signature Global (India) Ltd|| Colliers India

Mr. Pradeep Aggarwal,

1. Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd

Over the past three quarters, the interest rate on home loans has risen to over 9%, representing a 40-50% increase from the historical low of 6.5% per annum. As a result, many home loan borrowers are feeling the impact of this significant increase in interest rates. Although there hasn’t been a significant impact on housing demand so far, any further increase in policy rates could push the home loan interest rate beyond the psychological barrier of 10%, which could have a substantial impact on buyer sentiments and affordability.

To mitigate the loss caused by the increase in interest rates, not only should the government restrict any further increase in home loan interest rates, but it should also encourage state governments to provide rebates on stamp duty.

2.Vimal Nadar, Head of Research at Colliers India

Home loan interest rates are already at an alarmingly higher level of 9.5% and above in response to the increase in repo rates. While the rationale for another potential hike is being justified for inflation containment amidst a global gloomy environment, it is pertinent to evaluate its adverse impact on the real estate sector. With homebuyers already stretched on EMIs and loan tenures, a further hike in interest rate will hit them hard. The impact will be compounded in the current environment where the industry expects a lesser increase in income levels with housing prices remaining firm.