Hike in interest rates by banks may hit housing demand: Realtors


New Delhi, May 13 | Soon after the central bank Reserve Bank of India (RBI) raised the repo rate by 40 basis points, the banking sector imitated the same by increasing interest rates in lending and deposit schemes.

From major banks to even small finance banks, several joined the bandwagon of raising lending and deposits rate.

A number of banks raised their external benchmark based lending rates following an increase of 0.40 per cent in the repo rate — at which the RBI lends short term money to banks.

This move by the banks is expected to impact the growth of the real estate industry and may hit the housing demand.

“The all-time low home loan interest regime had boosted the housing demand and helped the economy to get back to the pre-Covid levels. It also enabled a robust recovery in the real estate sector,” said Kaushal Agarwal — Chairman, The Guardians Real Estate Advisory.

Now, the move by the banks to hike the interest rates along with the rise in input cost on construction might temporarily limit the growth momentum of the real estate sector.

“The sharp acceleration of interest rates by the banks will affect the homebuyers with concerns of EMI on home loans. The state government, which is the largest beneficiary of housing demand, should come forward to support the home buyers by reducing stamp duty rate to 3 per cent,” said Pritam Chivukula — Co-Founder & Director, Tridhaatu Realty and Treasurer, CREDAI MCHI.

Realtors feel that there might be a short-term impact on sales due to the rising property prices further putting the brakes on the overall demand.

“We have already started seeing a vertical movement in the home prices due to higher input costs on construction and increased stamp duty. The move by the banks to hike the interest rates will further put a dent on the homebuyer’s sentiments impacting the overall demand,” said Shraddha Kedia-Agarwal, Director, Transcon Developers.

Bhushan Nemlekar, Director, Sumit Woods feels with the increasing prices of property would be a huge setback for the real estate industry disrupting the ongoing growth momentum in the sector.

Echoing Nemlekar’s point of view, Sachin Chopda, Managing Director, Pushpam Group said the upperward revision in interest rates create a huge impact on the long-term goals by the investors.

Source: IANS

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Weekly Technical Share Market Outlook

Weekly Technical Share Market Outlook

The Indian market recovered sharply on the last trading day amid the weekend after a continuous fall. Market has managed to halt above 16000 Nifty levels after continuous losing streak. Index reacted violently, grasping Indian as well as global factors throughout the week. Simultaneously, Inflation is catching up and profit margins are taking a hit.


Sensex advanced 1532 points or 2.90 percent while Nifty gained 484 points or 3.07 percent in a week. Simultaneously, Bank nifty has overcome bear’s dominance ending the session with 3.49 percent gain. Sectorally,Nifty Metal saw the highest gains of 7.40 percent followed by the Realty and Auto added over 4% gain. On the flip side Nifty IT tumbled 2.82 percent on weekly basis. Midcap and Small Cap measures rising nearly 2 percent as well.

In Nifty stock, EICHERMOT gained 11.31% while TECHM lost 5.98% on a weekly basis. INDIA VIX closes at 23.10 suggests volatility driven market is going to remain intact. Coming to the OI Data, on the call side highest OI witnessed at 17000 Nifty followed by 16800 Nifty strike price while on the put side, the highest OI was at 16000 Nifty followed by 15800 Nifty strike price. Technically, Nifty has formed a Tweezer Bottom type pattern in the weekly chart suggesting a short term buying rally may drive the market until monthly expiry. On the daily chart, price has rebounded from the lower Bollinger band as well.

Momentum indicators MACD & Stochastic were trading with a positive crossover & reversed from oversold zone. However, Index is still struggling to get the support of 50 Simple Moving Average in daily chart. Short term investors and traders are advised to work with option strategies to neutralize the volatility. Overall, Nifty is having support at 15700 mark while on the upside 16700 followed by 16500 may act as an immediate resistance. While Bank nifty has support around 32500 while resistance is placed at 36000 on weekly chart.

Sumeet Bagadia
Executive Director
Choice Broking

Source: Choice India


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