‘RBI rate hike won’t hit property sector’

Realty consultants and developers say that the hike in key policy rates by the Reserve Bank...

Realty consultants and developers say that the hike in key policy rates by the Reserve Bank will not have a significant impact on the property sector.

“The rate hike is on expected lines. Policy rates have been raised primarily to control inflation. We will have to wait and watch for commercial banks,although we expect that there will be no increase in home loan rates,” DLF Group chairman Rajeev Talwar said.

In the first quarterly review of the monetary policy,the apex bank raised the rate at which it lends to banks by 25 basis points and the rate at which it borrows from banks by 50 basis points. The move,according to many,will have an upward bias on interest rates.

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However,Anuj Puri,Chairman and Country Head,Jones Lang LaSalle Meghraj,said that as the RBI has only increased the rates marginally,there will not be a significant impact on the realty sector.

“But if RBI keeps on doing this,then it might be a problem,” he warned.

Surprising many,the Reserve Bank had increased the repo and reverse repo rates by 25 basis points earlier this month.

Parsvnath Developers’ Chairman Pradeep Jain also believed that the rate hike would not have any major impact on the real estate sector.

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“As a result of the hike,there will be no additional burden on developers,as the borrowing cost is already high.

Buyers are also not going to get any hit since the home loan rates are higher than other countries. There is no scope for bankers to increase home loan rates,” he said.

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