Updated: Jul 17
Experts believe that once mortgage rates cross the 8–8.5% range, a change will be noticeable. According to a Motilal Oswal analysis, the significant increase in mortgage rates and greater inflation may cause a "marginal push-out" in demand shortly as well as the incapacity of developers to boost prices further.
In New Delhi: Although the Reserve Bank of India increased the repo rate twice during the quarter to combat inflation in recent months, has this had an impact on residential sales? Leading brokerage companies and real estate developers disagree.
With affordability at an all-time high, home sales are still growing month over month. The Covid-19 pandemic, according to experts, is what caused this movement in real estate investing since it caused a perspective change, particularly in light of hybrid work models or work-from-home prospects. However, they said that little adjustments might not have an impact on purchasing decisions.
"Affordability is at an all-time high notwithstanding the rise in the repo rate. For a while, the real estate market was in a decline, but now the tide has turned. Given that all segments are functioning well, we think the optimistic feeling would persist "Economic Times said Godrej Properties managing director Mohit Malhotra.
According to Motilal Oswal Financial Services, the pandemic's previous two years have witnessed a rapid recovery in demand, but prices have remained largely unchanged this period, reducing the impact on affordability.
Sanjay Dutt, managing director of Tata Realty & Infrastructure, explained that they continue to see month-over-month growth in sales volume, prices, and registration, adding that the recent increase in financing rates has not deterred the end-use buyer. He continued by saying that Covid-19 has highlighted the importance of home ownership, which provides both financial and emotional security.
The lack of developers and ready-to-move-in inventories has, however, limited the customer's options. The Real Estate Regulatory Authority (Reraestablishment )'s has also enhanced the builder-buyer attitude, which is now on the upswing. This has also made the entire lending and purchasing procedure easier.
Experts predict that once mortgage rates cross the 8–8.5% range, a change will be noticeable. According to a Motilal Oswal analysis, the significant increase in mortgage rates and greater inflation may cause a "marginal push-out" in demand shortly as well as the incapacity of developers to boost prices further.