Realtors fear rate hike to affect them, consumers

NEW DELHI: Realty firms and property consultants on Thursday said both consumers and developers are likely to be affected by the hike in key policy rates by RBI as loans would become dearer, though the impact would be marginal.

"It (hike in repo and reverse repo rates) will affect lending to the developers to some extent," Global realty consultant Knight Frank Chairman Pranay Vakil said.

He said the hike, which came into effect on Thursday, will also have impact on customers who have availed home loans.

"For the young people, loan repayment period will increase while EMIs will remain same (while) for old people EMI will increase marginally," Vakil said adding demand for real estate too would be impacted "marginally".

Raheja Developers' Managing Director Naveen Raheja too said the RBI's move would impact both companies and consumers.

"Cost of money will increase for the end user as well as developers," he said.

However, Ansal Property and Infrastructure Ltd's Vice-Chairman Pranav Ansal said the "small hike" would not have much impact either on prices or demand in the sector.

On the other hand, DLF Group Executive Director Rajiv Talwar said his firm was awaiting for the response of the banks on the RBI's credit policy.

"We hope banks will not increase the interest rate on home loan so that growth momentum is given a boost," he said.

Parklane Property Advisor's MD Akshay Kumar also opined that the increase in key lending and borrowing rates would have marginal impact on the sector.
Home, auto and corporate loans are likely to become expensive from October, with bankers on Thursday saying that interest rates may be hiked next month in response to the RBI raising policy rates to tame inflation.

RBI on Thursday raised short term lending (Repo) rate by 0.25 percentage points to 6 per cent and borrowing (Reverse Repo) rate by 0.50 percentage points to five per cent to tame inflation.