Chennai, March 30 (VOICE) With the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) expected to meet next month – the first one for FY24-real estate players are worried about the any hike in repo rates which in turn would increase home loan rates.
“Over the past three quarters, the interest rate on home loans has risen to over 9 per cent, representing a 40-50 per cent increase from the historical low of 6.5 per cent per annum. As a result, many home loan borrowers are feeling the impact of this significant increase in interest rates,” Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd said.
Agreeing that the hike in interest rates has not impacted the housing demand, Aggarwal said any further increase in policy rates could push the home loan interest rate beyond the psychological barrier of 10 per cent, which could have a substantial impact on buyer sentiments and affordability.
“To mitigate the loss caused by the increase in interest rates, not only should the government restrict any further increase in home loan interest rates, but it should also encourage state governments to provide rebates on stamp duty,” Aggarwal added.
According to Vimal Nadar, Head of Research, Colliers India, home loan interest rates are already at an alarmingly higher level of 9.5 per cent and above in response to the increase in repo rates.
“With homebuyers already stretched on EMIs (equated monthly instalment) and loan tenures, a further hike in interest rate will hit them hard. The impact will be compounded in the current environment where the industry expects a lesser increase in income levels with housing prices remaining firm,” Nadar said.