The Reserve Bank of India's (RBI) policy announcement today, June 7, has significant implications for the real estate sector, particularly in the context of the recent election results.
With a focus on maintaining economic stability, the RBI's decision to keep interest rates unchanged is expected to sustain the current momentum in the real estate market. Low borrowing costs will continue to make home loans affordable, thereby encouraging homebuyers and investors.
In its latest Monetary Policy Committee (MPC), the RBI has kept the repo rate unchanged at 6.5% for the eighth consecutive time. This is the first time the MPC met after the results of the general elections were declared.
— ReserveBankOfIndia (@RBI) June 7, 2024
Sanjay Palve, Senior Managing Director, Essar Capital Ltd shared: “This decision reflects a prudent and balanced approach to managing the country's economic health. By maintaining the repo rate, the RBI has provided stability in external benchmark lending rates, which is a welcome relief for borrowers as their EMIs will not rise. This decision supports a stable financial environment, allowing us to continue focusing on sustainable growth and strategic investments. We remain committed to leveraging this period of stability to drive innovation and efficiency across our operations, contributing to India's economic resilience and progress. The upward revision of the FY25 GDP projection to 7.2% is also a positive indicator of our robust growth trajectory.”
RBI's decision to keep the repo rate unchanged has largely been welcomed by the real estate industry.
Prashant Sharma, President, NAREDCO Maharashtra said: "We welcome the Reserve Bank of India's decision to maintain its current policy rates amidst the backdrop of volatile food prices, ongoing geopolitical tensions, and the Federal Reserve's extended pause on interest rates. Looking ahead, it is crucial for the RBI to continue monitoring the evolving economic landscape, particularly in the aftermath of the Lok Sabha elections and the upcoming Union Budget. The policies and fiscal measures introduced next month will play a significant role in shaping the trajectory of our economy. A balanced and forward-looking approach will be essential to support sustained growth and stability in the real estate sector and the broader economy. We remain optimistic that the RBI, with its vigilant and adaptive stance, will continue to foster an environment conducive to economic resilience and development."
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