Gurmit Singh Arora, National President, Indian Plumbing Association
The Reserve Bank Of India’s decision to maintain the repo rate steady at 6.5% during the ongoing global economic downturn and the spiraling inflation is indeed a pragmatic choice to protect the domestic economy. As the third-quarter financial growth of India moved up to 8.4% which was not a small number, however, it becomes a national priority to keep price stability. The prevailing repo rate is the fine-tuning measure to maintain growth and deal with inflation while the inflation increase or fall touches the RBI’s target range. Credit and financing being the core of the industry, the plumbing sector welcomes the move of the government to promote such policy that creates friendly environment for continuous business operation and investment decisions.
Regarding plumbing together with sanitary ware, decreasing profits as a result of increasing volatile costs of and supply chain had been a major concern in the past. As the lending rate eases down a bit, one can focus on restructuring the units and driving for efficiency instead of overlooking the increasing price restructuring. Pipe sanctioners, water pumps and supplying company will facilitate conditions for their cash flow and provide stability for cycle periods.
Moreover, we need to manage costs, upgrade production technologies, and refine channel coordination for a higher level of value delivery, otherwise, we will not be able to remain resilient. The medium-term move in the market will be further displayed by the increase in aid rate interest outside the economy in order to overcome the emergent inflation. Hence industry will be well-served to use the next few quarters when market becomes an uptrend to strengthen the capabilities as well as to competitively strategize.
Aman Gupta, Director, RPS Group
This measure is a continuation of the previous policy statement focused on strengthening conditions for homebuyers. Therefore, people decide to invest in homeownership, because they have a financial opportunity to do so, due to the low-interest rates of home loans. RBI’s decision hence incorporates homeowners with affordable rates and relief in the standpoint of the rising housing costs.
The consumers are happy with the maintenance of repo rate since this is an assurance which they consider any addition to their pie charts, portfolios, and accounts to be good either way. The decision serves as the pillar of sustainable growth of the housing industry over the long-run term and generates a speculative mood in the current housing environment. Familiarity of the market which indicates that the investment may return as many profits as they expect allow purchasers to pass everything confidently through the market.
LC Mittal, Director, Motia Group
The RBI has further proved its competence and rationality of its monetary policy once again as it has held the repo rate without any change for the seventh time since the last meeting. There is a considerable improvement in credibility and confidence of an average home buyer when a repo rate is stable and predictable. With this assurance, home loans become a realisable dream. This stability further indirectly results in a positive contagious effect on the real estate sector thereby contributing immensely to the Indian economy thus supporting the GDP as well as future growth prospects.
Secondly, MPC resolved to keep the repo rate at 6.5% throughout as its strategic decision. This flexible policy is an essential factor for qualified buyers starting a new home project in favor of the general economy. The persistence of an emerging home loan rate encourages consumer credit and serves as the basis of investment with stable growth.
Sanjoo Bhadana, Managing Director of 4S Developers
The MPC’s accommodative stance, which includes keeping the repo rate at 6.5%, reflects its commitment to sustaining economic growth in the face of global headwinds. With inflation on a controlled glide path until 2023, maintaining momentum seemed reasonable before conclusively controlling price-rise pressures.
For real estate, the pause in further rate hikes brings only temporary relief, since house loan rates remain elevated following the cumulative 250 basis point increase last year. As we proceed through 2023, the transmission of these cumulative hikes to bank lending rates will become more significant, affecting mortgage serviceability and affordability.
However, India’s overall economic forecast appears to be positive, supported by strong domestic demand drivers. Our favourable demographics, growing urbanisation, and rising household incomes continue to catalyse structural housing demand beyond temporary.
Anurag Goel, Director at Goel Ganga Developments
The Reserve Bank of India’s Monetary Policy Committee has kept the repo rate at which RBI lends funds to scheduled banks in India unchanged at 6.5 percent for the seventh time in a row with the aim of keeping inflation in check and while also keeping the reverse repo rate unaltered at which RBI borrows money from banks maintaining its accommodative policy stance to ease the process of recovery of the economy.
A lower repo rate will help banks to borrow money from the RBI at low interest rates which eventually will keep the interest rates of banks also lower. This move would help property buyers to reap the benefits of a record-low interest rate regime.
The increase of rising demand in the real estate sector is already showing the signs of recovery and with the recent rate cuts it would entice more buyers to get loans from the banks which can be a pivotal factor in the resurgence of demand giving the real estate sector industry the much needed boost.
The RBI Government measures to keep the interest rates unchanged will certainly help the market combat repercussions led by the pandemic a few years back across the various industries and is also a great move to increase the liquidity. The lower cost of funds will revive the demand in the real estate sector therefore we expect the buyers to come back in the market.
