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All Time-low Home Loan Rates:

Although coronavirus has toppled the lives of people, it sure has eased the real estate sector. For some time, the home loan rates are going to stay low as the Reserve Bank of India (RBI) and Monetary Policy Committee (MPC) has kept the key benchmark rates unchanged on June 4. This is a good opportunity for homebuyers. Since low home rates have been the most asked demand by real estate, the RBI has strengthened the sector by maintaining the status quo.

In the last two months, the real estate sector has been hit severely by the second wave of coronavirus. Intending to bring the economy back on track and boost demand in the real estate sector, the RBI has kept the repo rate at 4% and the reverse repo rate at 3.35%. Moreover, the Central bank has also decided to keep an “accommodative stance” to deduce the worrying impact of the pandemic.

Factors that have enhanced the best buying opportunity for homebuyers

  • RBI introducing liquidity into the market, and
  • government and developer concessions such as stamp duty exemptions

For lending purposes, banks are now differentiating between strong and poor developers. This helps in enhancing balance sheet efficiency, avoiding over-leveraging, and staying well-capitalized would help developers sail through and remain in the market.

Notable Statements by Significant Entities 

Stating the policy move to be “positive for homebuyers”, Anuj Puri, chairman of Anarock Properties said, “The continuation of this low-interest rate regime works very well for all borrowers as the environment of high affordability is likely to continue for some more time.”

“It is good to see that Reserve Bank of India is taking relevant initiatives to promote the housing sector. By retaining the interest rates at a decade low makes it the best time to buy a house. So this works two ways,” Saurabh Garg, co-founder and chief business officer of Nobroker.com.

“The low-interest rates for the last few months have already given a boost to the real estate sector upticking the demand in the last few quarters and enhancing the confidence of the homebuyers. The decision will help to sustain liquidity for some period as we are already witnessing the derailment of economic momentum due to the second wave of Covid-19 pandemic and lockdowns in different regions,” said Shraddha Kedia-Agarwal — director, Transcon Developers.

Anshuman Magazine, chairman and chief executive officer, India, South-East Asia, Middle East and Africa, CBRE, said the RBI’s accommodative stance will help sustain homebuyer sentiments which were strengthening pre-second wave. “With the repo rate and reverse repo rate being maintained at a status quo, banks and NBFCs will continue to render loans at reduced rates to homebuyers, thus supporting demand in the realty sector,” he added.

Conclusion

The growing housing affordability is bringing tremendous opportunities for homebuyers. Take it as an indication that India’s residential real estate market will witness soaring sales in the coming months. The year 2021 welcomes the new housing supply to remain affordable and mid-segment. The decision of RBI to keep benchmark rates unchanged is beneficial for home loan borrowers and is likely to continue for some time. It’s a great opportunity for homebuyers.