The equated monthly instalments of customers are expected to rise soon as the Reserve Bank of India raised its key lending rate for the first time in four years.
Customers have been enjoying low interest rates after the central banks globally flushed the market with liquidity to help boost the global economy.
Interest rates on home loans in India are currently at as low as 6.5% per annum that has helped the housing sector to revive from the Covid-19 induced impact.
”RBI’s surprise move to increase repo-rate by 40 basis points in the emergency meeting will create a hitch for the realty industry soon. The banks will anytime start increasing the interest rates on home loans that shall impact the homebuying decision going forward,” said Jitesh Lalwani – President, Homesync Real Estate Advisory.
Recently, Delhi NCR region, the most affected real estate market, saw some signs of revival after the unsold stocks declined 12% year on year, according to Latest ANAROCK data.
NCR’s unsold inventory declined by 12% in Q1 2022 against pre-pandemic Q1 2020, while the main Southern cities Bengaluru, Hyderabad, and Chennai saw their collective unsold stock increase by 32% in this period. MMR and Pune in the West saw their cumulative unsold stock reduce by 10%, the data showed.
“RBI’s decision to hike the policy rates was anticipated on the back of very high inflation. We have already started seeing a vertical movement in the home prices and the decision will further put a dent on the homebuyer’s sentiments impacting the overall demand,” said Shraddha Kedia-Agarwal, Director, Transcon Developers.
Not only home loan EMIs, but other EMIs such as car loans and consumer loans are also likely to be costlier in the coming days as analysts expects more such rate hikes by RBI before June.
