The real estate sector in Pune has taken the Reserve Bank of India’s (RBI) announcement to increase the repo rates in their stride without much cribbing. Developers feel that increase in interest rate of home loans due to hike in repo rate would not adversely affect the sale of flats during the forthcoming festival season.
The Vice-President of CREDAI (Pune), Rohit Gera, said buyers can still afford to buy homes with an increased interest rate.
“If we calculate properly, this 25-basis-point hike comes up to an increase of about Rs.518 per lakh. This rise can be adjusted with one movie less per month for a family. This will not affect the sale of houses as the real estate prices and interest rates are rising slowly and alternately. If both had gone up together, then it would have not been an affordable price hike,” Gera explained.
Another developer, DS Kulkarni, felt that sales could be affected but only by a bare minimum. “Since the interest rates on loans are increasing constantly, prospective buyers have become immune to such developments. They have started planning to buy flats that would suit their pocket, instead of preferring an area of their choice,” he said.
Echoing similar views, Ranjit Naiknavre, the National Governing Council Member of CREDAI and Director of Naiknavre Developers, said the hike in interest rates would impact those planning to buy second or third homes. They would wait for rates to come down.
“But first-time home buyers need not be concerned. Instead of looking at rates of home loans, they should consider the number of EMIs. As long as EMIs suit your budget, it will be a safe situation,” he stated.
However, Kapil Gandhi, MD of Sigma One Landmarks differed. He said that homes will become dearer for the prospective buyers and could affect sales. “Due to increasing input costs, real estate rates are bound to increase. This will result in low sentiment amongst buyers,” he predicted.
