New Delhi, April 8 Stable interest rates on home loans, combined with strong demand from end-users, will help real estate developers sustain sales momentum, said real estate bodies CREDAI and NAREDCO on Wednesday, while praising the RBI's decision to keep the repo rate unchanged.
The two associations, which have around 20,000 real estate developers as members, pointed out that the real estate sector could face pressure from rising input costs due to the conflict in West Asia, but asserted that there are significant long-term growth opportunities.
On Wednesday, the Reserve Bank of India kept its key policy rate unchanged, adopting a wait-and-see approach as policymakers assessed the impact of the six-week Iran conflict on energy supplies, inflation, and growth.
CREDAI President Shekhar Patel said, "We view the RBI's decision to maintain the repo rate as a balanced and prudent approach, particularly in light of ongoing global geopolitical tensions and their impact on inflation, supply chains, and capital flows."
While the domestic economy continues to demonstrate resilience, these external uncertainties necessitate a calibrated policy stance, he added.
"A stable interest rate environment provides much-needed clarity for both developers and homebuyers, helping to sustain demand across the housing market," Patel said.
The CREDAI president also noted that there could be some near-term pressure on raw material prices due to supply chain disruptions.
However, Patel expressed confidence that the stable monetary policy, coupled with strong demand from end-users, will enable the real estate sector to maintain steady growth.
NAREDCO Chairman Niranjan Hiranandani also welcomed the decision.
"While global uncertainties and rising input costs may pose short-term challenges, the sector continues to benefit from strong domestic fundamentals," he added.
Stable interest rates on home loans and relatively steady interest rates will provide much-needed confidence to both developers and homebuyers, Hiranandani said.
"This stability is helping to maintain demand, particularly in mid and premium housing segments, while also supporting long-term investment decisions," he added.
Overall, Hiranandani said the outlook for the real estate sector remains positive.