Inflation and global economic conditions are having a direct impact on India’s housing market. Due to expensive houses,there has been a slight decrease in sales. In such a situation,all eyes are once again on the Reserve Bank of India (RBI). In the RBI meeting held in February,for the first time in the last 5 years,the interest rate (repo rate) was cut by 0.25%,bringing it down to 6.25%.
Now the next important meeting is going to be held between 7 and 9 April,which will be chaired by RBI Governor Sanjay Malhotra. Builders say that expensive houses are being sold,but some more help is needed for cheap houses. If RBI cuts the interest rate once again,the confidence of home buyers will definitely increase. So will RBI make any big announcement this time too? Let’s know.
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Change in sales figures
A report by real estate company Knight Frank India shows that between January and March this year,sales of homes priced above ₹ 1 crore have increased by a whopping 16%. At the same time,sales of homes priced above ₹ 50 crore have jumped by an astonishing 483%. In contrast,sales of homes priced below ₹ 50 lakh have declined by 9% and reached 21,000 units. Company chairman Shishir Baijal says that the main reason for this is that now people are showing more interest in expensive homes and their prices have also increased significantly. This trend shows that the market for high-income group buyers is still strong,while middle and low-income group buyers are facing challenges due to rising prices and interest rates.
How much did the prices of houses increase
According to a report by Anarock Group,the prices of houses in 7 big cities of the country have increased from 10% to 34% in the last year. The highest increase of 34% has been in the National Capital Region (NCR). After this,Bengaluru has increased by 20%. The main reason for this is that most builders are now focusing more on the construction of luxury and ultra-luxury houses,which have higher profit margins. Developers focusing on affordable housing are facing challenges like rising costs and low margins.
Why is the interest rate expected to decrease
Anuj Puri,Chairman of Anarock,says that if RBI cuts the interest rate,it will increase the ability of people to take home loans and the burden of loans on them will also be reduced. This will make the environment for buying a house even more positive. Lower interest rates will not only reduce EMIs but also make more people eligible for loans,thereby increasing demand.
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