RBI Monetary Policy October 2021: Real Estate Outlook


The Monetary Policy Committee (MPC) maintained status quo by keeping the policy rates unchanged at 4 per cent. NewsBarons connects with Real Estate industry leaders to share their views and opinions on the MPC announcement.


• RBI keeps repo rate unchanged at 4%, maintains accommodative stance
• Reverse repo rate also unchanged at 3.35%
• The projection for real GDP growth is retained at 9.5%
• Retail inflation for FY22 projected to be 5.3%
• CPI inflation for Q1 of FY 2022-23 is projected at 5.2%

The RBI has not been in a hurry to act on rates: Dr. Niranjan Hiranandani

www.newsbarons.comThe Reserve Bank of India (RBI) Monetary Policy Committee (MPC) kept key interest rates unchanged, while retaining an accommodative stance. This, the RBI Governor said, was to help revive the economy, which is facing a slowdown due to the coronavirus pandemic.

From a housing perspective, this translates into historic low home loan interest rates continuing with positive effects including a boost to the festive sentiment, which should result in higher quantum of sales.

The outcome of the RBI policy meet was broadly in line with expectations. Despite the rate hikes by other central banks and guidance by the US Federal Reserve to reduce its bond purchases from November, the RBI has not been in a hurry to act on rates.

As RBI Governor Shaktikanta Das said, while explaining the RBI’s liquidity stance, “We don’t want to rock the boat when the shore is near as there is a journey beyond the shores” – one would concur.

[Dr. Niranjan Hiranandani is the National Vice Chairman of NAREDCO & MD of Hiranandani Group]

RBI’s accommodative stance will allow banks to continue providing home loans at the current levels: Shishir Baijal

www.newsbarons.comThe decision to maintain status quo on key policy rates is significant as it comes at the onset of the festive season. We welcome the RBI’s move to keep rates unchanged despite the inflationary pressures, as adequate liquidity, and stable repo rate will play a catalytic role in the robust recovery of the country’s housing sector.

Over the last few quarters, there has been a fundamental change in buyers’ expectations and attitude towards home ownership, which has resulted in the residential real estate sector perform exceedingly well across all segments. Many factors, especially demand stimulants like stamp duty cut and lower circle rates along with lowest ever home loan rates, have helped in converting latent demand to sales. RBI’s accommodative stance will allow banks to continue providing home loans at the current levels.

At this juncture we are favorably poised with an encouraging ramp up on vaccination rate across the country, ongoing festive season, and opening up of the country, the time is right to ensure an orbital shift for the industry. Significant and timely measures for a sector like real estate, which has strong linkages with several other industries, would translate into a significant push to overall economic growth of the country.

[Shishir Baijal is the Chairman & Managing Director of Knight Frank India]

A welcome move for the sector: Surendra Hiranandani

www.newsbarons.comRBI’s decision to continue with the accommodative stance by keeping the interest rates unchanged is a welcome move for the sector. The decision will induce optimism, encourage buyer’s confidence and propel pent up housing demand.

The pandemic has reinstated the importance of home ownership. Low interest rates amidst the festive season, positive market sentiment and receding Covid-19 cases, together create a favourable condition for home-buying. To benefit from one of the best home-buying periods, homebuyers must immediately translate their plans in to action and avoid prolonging them further.

[Surendra Hiranandani is the Chairman and Managing Director of House of Hiranandani]

We expect residential sales to further increase in the coming months: Anshuman Magazine

www.newsbarons.comThe RBI’s decision to maintain the repo and reverse repo rates at 4% and 3.35% has come at an opportune time, with the country gearing up for the festive season which often sees a spurt in residential sales. As loans would remain cheap, we expect residential sales to further increase in the coming months.

The RBI’s focus on reviving and sustaining growth through its accommodative stance while keeping an eye on inflation levels is expected to accelerate the economic recovery, as is evident from the fact that the central bank expects the country to grow at 9.5% in FY 2021-22. Therefore, we are optimistic that this unprecedented growth would augur well for India’s real estate market as well.

[Anshuman Magazine is the Chairman & CEO, India of South-East Asia, Middle East & Africa, CBRE]

The ongoing festive quarter will see at least a 35-40% yearly rise in overall housing sales: Anuj Puri

www.newsbarons.comAs expected, RBI maintained the monetary policy pause, keeping the repo rate unchanged at 4% and reverse repo rate at 3.35%. In short for homebuyers, the low home loan interest rates regime will continue in the market and help foster housing demand during the ongoing festive season. Notably, this is a period when housing sales usually surge on the back of attractive offers by developers and lending banks.

The green shoots of economic revival coupled with the prevailing low interest rates will be conducive for the residential sector in the short to mid-term. ANAROCK Research indicates that we may see at least 10-15% growth in housing demand in the ongoing festive period (Oct.-Dec) across the top 7 cities against the preceding quarter. In Q3 2021, the top 7 cities saw total housing sales of nearly 62,800 units – already the best quarterly sales since the pandemic.

If ANAROCK’s predictions are accurate, the ongoing festive quarter will see at least a 35-40% yearly rise in overall housing sales across the top 7 cities as against the same period in 2020. In Q4 2020, the top 7 cities saw total housing sales of nearly 50,900 units.

[Anuj Puri is the Chairman of ANAROCK Group]

A good time for homebuyers: Ramesh Nair

www.newsbarons.comFor the 8th consecutive time, the Reserve Bank of India has kept repo rates unchanged at 4%. We predicted that the repo rate will remain constant to boost consumption in the ongoing festive period. It will go a long way in steering housing sales. Several banks have already lowered their home loans rates by a stable repo rate since September 2021. Overall, it is a good time for homebuyers who can avail of low home loan rates, along with steady prices”.

[Ramesh Nair is the Chief Executive Officer, India and Market Development, Asia at Colliers]

Strong demand expected to continue in the festive season as well: Sandeep Runwal

www.newsbarons.comThe RBI has always taken a proactive stance to ensure liquidity in the past few months since Covid. It is imperative that low mortgage rates would continue for at least some more time now or maybe until the end of the year. The end-user interest has increased mostly due to the all-time low home loan interest rate regime which has provided the required fuel for the growth of the economy along with the real estate industry with which several other allied sectors are linked. Apart from the low-interest rates, the consumers’ realization of owning a home along with key policy measures have been the growth drivers for the real estate sector in the past few quarters and the strong demand is expected to continue in the festive season as well.

[Sandeep Runwal is the Managing Director of Runwal Group and President Elect of NAREDCO Maharashtra]

Best time to buy a home: Ashok Mohanani

www.newsbarons.comThe economic growth needs to be supported through monetary policy and this is the foremost reason that the RBI has continued its accommodative stance. We have seen a revival in real estate and related sectors because of the rising vaccination numbers. Also, the interest rates will continue to be at a record low for some time. Therefore, this is the best time to buy a home as it gives the aspiring homebuyers a lifetime opportunity to purchase their dream home with various festive offers as well as all-time low interest rates.

[Ashok Mohanani is the President of NAREDCO Maharashtra]

The RBI’s decision will positively impact housing sales: Rohit Poddar

www.newsbarons.comThe RBI’s decision to maintain the repo rate unchanged at 4%, point towards the road to economic recovery. It is good to see that overall economic activity in the country has evolved and inflation has remained lower than the anticipated numbers. Expected gradual improvement in the domestic conditions and the successful drive of vaccination campaign will boost consumer sentiments and improvise aggregate demand in the country. We are evidently in a much better place compared to the last year owing to the proactive measures taken by the government which is resulting into achieving stability in the economic fundamentals of the country. Furthermore, this will positively impact the housing sales in the upcoming festive season and the RBI is confident of enabling economic growth with the measures taken.

[Rohit Poddar is the Managing Director of Poddar Housing and Development Ltd.]

RBI is determined to help India sail through the recovery phase: Rajan Bandelkar

www.newsbarons.comThe status quo maintained by the Reserve Bank of India in terms of the repo and the reverse repo rates and the accommodative stance is a very bold and appreciable move. By not toeing the line of its global peers, by tightening the ease of liquidity, the RBI has shown that it is determined to help India sail through the recovery phase and help move towards high growth rate.

The move could not have come at a better time and this decision of the RBI’s Monetary Policy Committee is the perfect festive gift for the Indian citizen who wants to have a home of their own. With interest rates already at unprecedented low levels, now it is a great opportunity for the fence-sitting prospective home buyers to fulfill their dream, during the upcoming festive season.

[Rajan Bandelkar is the President of NAREDCO India]

The optimism of RBI regarding economic growth is welcome: Ram Raheja

www.newsbarons.comThe decision to maintain the repo rate and reverse repo rate by the RBI is in line with expectations. It has also affirmed to its accommodative stance, which will provide stability to the markets and give much-needed liquidity. This status quo will further allow demand creation including for high involvement products like real estate. RBI’s resolve to keep easy system liquidity and low interest is key to the recovery of the real estate industry and the overall economy.

The real estate sector is expected to continue benefiting from the pass-through of low benchmark lending rates to end consumers, especially in the residential segment. The optimism of RBI regarding economic growth is welcome; it will also help in sustaining economic stability as well as keep the real estate sector stay afloat during these unprecedented times. The demand for homes is likely to continue to gain momentum going forward.

[Ram Raheja is the Director of S Raheja Realty Pvt Ltd.]

A big positive for the housing sector: Amit Goyal

We welcome RBI’s status quo on policy rates. This will mean a continuation of low home loan rates which will keep the demand momentum for homes going. In the last couple of months, we have witnessed a further reduction in interest rates of home loans to 6.5% per annum by leading financial institutions.

The RBI governor also announced that there are strong signals of recovery in the service industry, especially in IT services. The expected GDP growth target for the current fiscal has been raised as well. Factors also indicate softening of inflation in the near term. All in all, this brings in a lot of confidence in the Indian economy, which itself is a big positive for the housing sector.

[Amit Goyal is the CEO of India Sotheby’s International Realty]

Government’s favourable policy measures will help sustain demand during the festive season: Shraddha Kedia-Agarwal

www.newsbarons.comRBI maintaining status quo on key policy rates was expected to maintain the financial stability before the festive season. The all-time low interest rates have already given a boost to the real estate sector upticking the demand in the last few quarters and enhancing the confidence of the homebuyers. It has also helped the sector to regain its strength as well as stay afloat during these unprecedented times. The Government’s favourable policy measures along with festive deals will help sustain the demand during the festive season.

[Shraddha Kedia-Agarwal is Director of Transcon Developers]

We are hopeful that the accommodative move by RBI will enable demand creation: Vinit Dungarwal

www.newsbarons.comThe RBI has been doing the heavy lifting to bring back the economy on track since the start of the pandemic. In line with the expectations, the RBI has kept its monetary stance accommodative, keeping rates unchanged in its monetary policy announcement. Add to it we have had a good monsoon season and robust production. The Inflation too has remained lower than the anticipated numbers. All these are positive indicators for our economy. We are hopeful that this accommodative move by RBI will foster the demand for affordable and mid-segment housing in this festive quarter and enable demand creation.

[Vinit Dungarwal is Director at AMs Project Consultants Pvt. Ltd.]

We expect this festive season to be a good one for the sector: Pradeep Misra

The continuation of accommodative monetary policy by RBI means home loan interest rates would continue to remain low and this will help the real estate sector, particularly in tier 2 & 3 cities. Amid the festive discounts and schemes being offered by the industry accompanied by lower interest rates, we expect this festive season to be a good one for the sector.

[Pradeep Misra is the MD of New Modern Buildwell Private Ltd.]

Homebuyers should take advantage of the current scenario: Vinay Kedia

www.newsbarons.comThe RBI and the government have been implementing a number of measures to help the real estate sector. Although the low interest rates will provide sustained growth for the real estate sector, developer’s focus on project completion and delivery will be the key factors driving the real estate demand going forward. Homebuyers should take advantage of the current scenario as many major banks and housing finance organisations are offering low-interest home loans owing to the festive season ahead.

[Vinay Kedia is Director of Prescon Group]

Residential demand is reviving in the pandemic context: Lincoln Bennet Rodrigues

www.newsbarons.comRBI maintaining status quo on key policy rates was expected given the inflationary concerns in recent months and also maintaining financial stability and boost demand during the ongoing festive season. Residential demand is reviving in the pandemic context and this needs to be fostered. We have already seen early signs of improvement in economic activity following the easing of restrictions post the peaking of the second wave. Given the upcoming festive season, which is considered auspicious by a large number of Indians to make big-ticket purchases, the timing of reduction in interest rate by banks recently couldn’t have been better and will lead to a substantial increase in sales. The low interest rate regime is going to be a game-changer for the whole real estate sector especially at a time when the economy is on a recovery trail. For any investor, it’s a time of great opportunity and for the end-customer, it’s a good time to buy. While the impact of Covid 19 has been high on specific segments, the luxury and second home sentiment has not been impacted as much. We hope that the government continues to pay attention to the requirements of the sector, which is one of the largest employers in the country. We would also like to see measures to enhance demand in the real estate sector by lowering of stamp duty and registration charges in the near future. The sector is set to become a large driver of the economy with its contribution to GDP projected to increase from the current 7 per cent to 13 per cent by 2025. Overall, we hope the government takes measures which strengthen the real estate sector and affirms robust infrastructure growth.

[Lincoln Bennet Rodrigues is the Chairman & Founder of The Bennet and Bernard Company]

Right time for prospective home buyers to invest: Ramani Sastri

www.newsbarons.comThe RBI’s approach to continue with the status quo is on expected lines to enable the growth momentum that seems to have set in during the last couple of months. For home buyers, this decision will help reinstate confidence and further access to affordable home loans. It also goes without saying that the real estate industry’s perennial hope is fixed on lower interest rates as it improves affordability. Home loan interest rates have already gone down substantially in the recent past, and are presently at an all-time low and property prices have been stable. Hence this is the right time for prospective home buyers to invest. Homebuyers will continue to take advantage of the lowest ever home loan interest rates. The move to reduce interest rates by few banks recently is encouraging and will pave path for robust housing demand further. We are seeing a lot of first time home buyers, who were not able to reach a decision in the previous quarters due to the lockdown are eager to conclude the deal now. There is a healthy stock of ready to move in and nearing completion inventory and that will likely be of high interest during the festive season. Real estate is definitely an asset class that one must remain invested in today and in the long term and looking ahead, we do believe that markets will see sustained growth over the next few years. With improved GDP growth estimated in the near future, we expect that the real estate sector will contribute a substantial share to overall economic development.

[Ramani Sastri is the Chairman & MD of Sterling Developers Pvt. Ltd.]

Low interest rates have been a crucial factor in the revival of demand: Pritam Chivukula

www.newsbarons.comWe welcome the RBIs decision to continue with their accommodative stance ahead of the festive season. The rising vaccinations should lead to opening up of the contact-intensive services sector which were hit hard by the virus. The low interest rates have been a crucial factor in the revival of the demand in the real estate sector. Also, the reduction in home loan interest rates by leading banks for a limited period have extended the best buying opportunity for the homebuyers. The buyers are already coming back to the market and we feel that the upcoming festive season will be a lot better than the previous years. For the next few days, the buyers can swoop in on good deals on the back of rock-bottom interest rates on home loans along with festive offers from good developers on the eve of expected price rise.

[Pritam Chivukula is the Co-Founder & Director of Tridhaatu Realty and Hon. Secretary of CREDAI MCHI]

All-time low rates regime in the festive season will boost the housing demand: Kaushal Agarwal

www.newsbarons.comThe RBI and especially the MPC are to be commended for maintaining an accommodative stance for the eight consecutive time now. Their approach towards tackling the economy amidst the pandemic has been one of the finest. The various policy reforms along with the all-time low housing loan rates have given the much-required fillip to sales activity in the last few quarters. The all-time low rates regime in the festive season will boost the housing demand and help the economy to get back to the pre-COVID levels.

[Kaushal Agarwal is the Chairman of The Guardians Real Estate Advisory]

Extremely productive and industry friendly: Cherag Ramakrishnan

This approach is extremely productive and industry friendly. Especially the interest rate sensitive sectors like Realty will benefit immensely from not only all time low interest rates but also high levels of liquidity that the Central bank has allowed the banks to maintain.

[Cherag Ramakrishnan is the Managing Director of CR Realty]

Excellent investment opportunities in the residential segment: Himanshu Jain

www.newsbarons.comRepo rate cuts have been kept unchanged by the RBI to sustain the financial stability and boost demand during the ongoing festive season. The current scenario offers excellent investment opportunities in the residential segment as affordability is at all-time high. With the banks and financial institutions further slashing the interest rates, it will provide a much-needed fillip to the real estate sales in the festive season.

[Himanshu Jain is VP – Sales, Marketing and CRM of Satellite Developers Pvt. Ltd.]

Extended accommodative stance will continue to serve the markets well in the festive season Bhushan Nemlekar

On an expected line, the monetary policy committee (MPC) has kept the repo rate unchanged with an extended accommodative stance for the eight consecutive time that will continue to serve the markets well in the festive season. The prevailing low home loan rates are already enticing for homebuyers which have immensely benefited the real estate sector. The record low interest together with the festive deals will encourage the consumers to proceed with their purchase and quickly close their transactions.

[Bhushan Nemlekar is Director of Sumit Woods Limited]