Buyers Disappointed As the Repo Rates Remains Unchanged
May 24, 2017 Home Loan
On Wednesday, the Reserve Bank of India (RBI) left the home buyers unhappy by keeping the repo rates unchanged to 6.25 percent in its monetary policy review. This move has hugely disappointed the market and the potential home buyers in general. Since the Union government’s announced the moves to boost the affordable housing, it was expected that the repo rates will be slashed down to make the home loans even cheaper. But the recent announcement if the unchanged repo rates have left the buyers disappointed.
Since the demonetization, the home buyers have been expecting the outcome to be on their side. Even the authorities and experts have been assuring that there will be a substantial reduction in rates to boost the real estate sector as the bank vaults are now flushed with money.
The cuts in repo rates would have helped to ease the borrowing costs. This, in turn, would have provided the necessary push to the government’s affordable housing dream. According to some, if the government is serious about the affordable housing project then they should have provided the lower repo rates for the home buyers along with incentivising the developers to build more projects.
While some say that RBI’s status quo was not unexpected. Other factors are in play keeping in mind that the credit growth has slipped to multi year low, despite the lending rates falling nearly 150 points. Demonetisation has helped in rate cuts. On one hand, it has helped some borrowers while on the other it has helped some to squeeze more savings.
Home loan borrowers were expecting further slashing in the rate cuts. Since demonetization, the lending rates have reduced considerably. Home buyers are now wondering if the rates were kept on hold, to assess the effect of demonetization. If this is true, then the demonetization does not hold a stronger base. Experts point out that the country needs some relaxation in the interest rates to boost the real estate sector which has remained cold in past couple of years.
Why the repo rate have left buyers disappointed:
The cash flow among the buyers has been affected severely due to demonetization.
Home buyers are now wondering why the cost of lending hasn’t reduced even though the banks are now flushed with money.
Buyers haven’t been incentivised with the lower rates even though the union budget has provided several measures to boost affordable housing.
Lower interest rates could have given the boost to the unsold inventory in the real estate sector.
Since the demonetization, the home buyers have been expecting the outcome to be on their side. Even the authorities and experts have been assuring that there will be a substantial reduction in rates to boost the real estate sector as the bank vaults are now flushed with money.
The cuts in repo rates would have helped to ease the borrowing costs. This, in turn, would have provided the necessary push to the government’s affordable housing dream. According to some, if the government is serious about the affordable housing project then they should have provided the lower repo rates for the home buyers along with incentivising the developers to build more projects.
While some say that RBI’s status quo was not unexpected. Other factors are in play keeping in mind that the credit growth has slipped to multi year low, despite the lending rates falling nearly 150 points. Demonetisation has helped in rate cuts. On one hand, it has helped some borrowers while on the other it has helped some to squeeze more savings.
Home loan borrowers were expecting further slashing in the rate cuts. Since demonetization, the lending rates have reduced considerably. Home buyers are now wondering if the rates were kept on hold, to assess the effect of demonetization. If this is true, then the demonetization does not hold a stronger base. Experts point out that the country needs some relaxation in the interest rates to boost the real estate sector which has remained cold in past couple of years.
Why the repo rate have left buyers disappointed:
The cash flow among the buyers has been affected severely due to demonetization.
Home buyers are now wondering why the cost of lending hasn’t reduced even though the banks are now flushed with money.
Buyers haven’t been incentivised with the lower rates even though the union budget has provided several measures to boost affordable housing.
Lower interest rates could have given the boost to the unsold inventory in the real estate sector.
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