Financial assistance for homebuyers needed to enable smoother home-buying experience

Following repeated rate hikes, the industry experts said that real estate developers can provide appropriate financial assistance for homebuyers to enable a smoother home-buying experience that would minimise the overall financial burden.

Sanjay Dutt, MD & CEO, Tata Realty & Infrastructure Ltd said that the Indian economy has shown resilience and up to a certain point will continue to grow strongly even amidst the ongoing global economic slowdown.

“The rate hike of 35bps to 6.25 per cent by the Reserve Bank of India was on the expected lines. Although it will push the interest rates on home loans, and overall strong talent driven job markets, the coming quarter of 2022-23 remains the best time to invest in all segments of real estate. India’s GDP growth forecast from 6.5 per cent to 6.9 per cent, shows a higher elasticity to global shocks and the continued buying power and investments made in the real estate sector, despite the possibility of more repo rate hikes in the coming months,” he said.

“We believe that it is important for real estate developers to provide appropriate financial assistance for homebuyers to enable a smoother home-buying experience that would minimize the overall financial burden. The goal here should be of achieving collective growth, keeping consumers at the centre,” Dutt added.

Amit Jain, Director, Mahagun Group, said that there was no surprise that the repo rate raise has a corollary impact on the home loan lending rates of banks which sees unprecedented growth in percentage points. “It renders itself out of the affordability levels of the common masses and home buyers who specifically are looking to invest in affordable housing projects. Buyers, who buy homes from their savings and income reserves or familial wealth, will not be impacted that much, but buyers, who are relying majorly on loans to invest in homes, will have to bear the burdens of increased interest rates and home prices,” he added.

Sanjay Sharma, Director, SKA Group said that the consumers, who have mortgages, will be severely hurt. “Home prices will definitely be impacted by rising construction and developer financing rates. However, we look forward to swallowing the increase at the earliest possible. Developers must prioritise profitability in order to focus on making a better product, which should provide sustainable sales numbers,” he added.

Yash Miglani, MD, Migsun Group said, “The repo rate hike will not have prominent ramifications on the real estate demand, but will help curb inflation which also affects the realty sector. But the alarming consequence of constant repo rate hikes is that it will further dilute the affordability factor in homes for mid-income groups and families.”

20221207-134003

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