Low interest rates to boost housing demand

New Delhi: Real estate industry on Friday welcomed the RBI's decision to keep key policy rates unchanged, saying low interest rates will boost home buying sentiment and drive demand especially during the upcoming festival season.

However, builders demanded that steps should be taken to enhance liquidity in the real estate sector. The Reserve Bank of India (RBI) expectedly kept interest rates unchanged at a record low as it chose to support economic revival over inflation. The reduction in repo rate by 250 basis points since February 2019 has resulted in a cumulative decline by 217 basis points in the weighted average lending rate (WALR) on fresh rupee loans.

Commenting on the monetary policy, Credai National President Harsh Vardhan Patodia said: "With the outbreak of the second wave and the fear of a third wave, RBI's guarded move to hold the repo rate at 4 per cent reflects the continuation of its accommodative stance ensuring the lowest lending rates to keep business operational across sectors."

"We are optimistic that home loans will continue to be affordable, thereby propelling the growth of the housing segment," he added. Naredco President Niranjan Hiranandani said the low interest rate will augment the home buying sentiment and facilitate financial cushion to log the deals in backdrop of festive tailwinds.