New Delhi: Real estate companies have expressed concern that rising home interest rates could hurt home sales.
Property consulting firms Anark, Knight Frank India, JLL India and Collios India have jointly stated:
The Reserve Bank of India continues to raise interest rates on loans to control inflation. The repo rate on short-term loans to banks was raised by 0.4 per cent in the last monetary policy, and is currently raising the interest rate by 50 basis points in Wednesday’s monetary policy announcement. While this is a contradictory event, the announcement by the Reserve Bank will only lead to a further increase in interest rates on home loans.
When the international financial crisis hit in 2008, the interest rate on home loans was more than 12 percent. In comparison, current interest rates are lower.
However, experts in the real estate sector predict that the move by the Reserve Bank will have a significant impact on home sales in the coming months. In particular, real estate companies say the impact will be significant on low-cost and mid-range home sales.