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Banks raise lending rates: Here’s what realty experts have to say

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Close on the heels of the Reserve Bank of Indias (RBI) recent hike in repo rate by 40 basis points, besides giving indications it would raise further in the upcoming monetary policy review meets, several Indian lenders too have raised their lending rates.

On Wednesday, lending major HDFC and PNB Bank raised their lending rates by 5 basis points and 15 basis points, respectively.

The upward revision in rates will essentially lead to an increase in EMIs for borrowers.

Recently, the State Bank of India (SBI) and Bank of Baroda also hiked their lending rates across various tenures, as per reports.

At the same time, the government also waived customs duty on the import of some raw materials, including coking coal and ferronickel, used by the steel industry. Steel is a key input for the real estate industry.

Here’s what some of the developers and domain experts have to say on the impact of rate hike on the realty sector and its demand:

Vivek Rathi, Director, Research at Knight Frank India

An increase in home loan interest rate by 1 per cent reduces house purchase affordability by 7.4 per cent. We are on a landscape of rising interest rates and increasing property prices, which will put pressure on affordability if they move beyond income growth.

At the current juncture, strong income growth is supportive of homebuyer affordability. Hence, a comfortable affordability level coupled with the renewed enthusiasm for home ownership shall help maintain the strong housing sales momentum in the near term.

Dharmesh Shah, CEO of Hero Realty

The retail buyers in the home segment have seen an incredible increase post-pandemic. Despite an increased interest rate the market is expected to be buoyant but this increase has come at the wrong time.

The home buyer segment needs a pat on the back and not an increase in the interest rates. However, this also considerably marks a sense of stability as the end of low-interest rates will bring the serious buyers back in focus.

Sanjay Sharma, Director, SKA GROUP

At a time when the real estate sector had just begun to pick up, the increase in home loan interest rates, even though negligible, would act as a psychological barrier for the buyers. Coupled with the increase in input costs that to an extent had forced the developers to increase in prices, it would act as a dampener to the buyer’s spirit, especially the ones looking for homes in the affordable segment.

Nayan Raheja, Raheja Developers

The increase in interest rates by banks could not have come at a worse time. With buyers shaking off the negative spirits of the pandemic and seeking to benefit from the historic low costs of the dwelling units as well as historic low home loan interest rates, the move by the banks would definitely have an impact on buyers’ sentiments. Further, it will affect the real estate sector that had begun to pick up pace after a gap of two to three years and which among others is one of the largest generators of employment. Most of all it will also signal that the days of low home loan interest rates are over.

Sachin Gawri, CEO and Founder Rise Infraventures Limited

The news of interest rate hikes by the banks especially after RBI had raised the base rates were a foregone conclusion. However, I wish that the banks had waited for a few more months for this series of hikes. At least it could have waited for the real estate sector to pass on the benefits of the reduction in fuel prices and the decrease in the price of iron (through hike in export duty) to the customers. The move will also affect the development of the commercial and retail segments.

Deepak Kapoor, Director of Gulshan Homz

The current hike in home loan interest rates by banks will surely convey to home buyers that interest rates are only going to go northwards. Contrary to the popular perception that any such increase only affects the affordable housing segment, the move, according to me, will also leave a big impact in the big-ticket luxury segment that involves high volumes of money, hence higher EMIs and higher interest amount. Besides, since one of the banks had increased its RPLR three times in one month, the move will also add to the uncertainty regarding the quantum of hikes in the future.

Business

‘Innocent Unless And Until Proven Guilty’: Adani Group Issues Statement In The US Bribery Indictment; Denies Charges, Calls Them Baseless

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The Adani Group, which has been at the eye of the storm since the beginning of the new day, has issued a statement in the US Indictment matter.

Adani Denies Charges

The company, in a statement procured by the conglomerate-owned IANS, said, “The allegations made by the US Department of Justice and the US Securities and Exchange Commission against directors of Adani Green are baseless and denied.”

Furthermore, the statement asserted its stance and added, “As stated by the US Department of Justice itself, “the charges in the indictment are allegations and the defendants are presumed innocent unless and until proven guilty.” All possible legal recourse will be sought.”

Committed to Highest Standards

The Adani Group further added that it has always upheld and is steadfastly committed to maintaining the highest standards of governance, transparency and regulatory compliance across all jurisdictions of its operations.

US Court Indicts Adani and Co.

The company, in an attempt to assuage stakeholders, partners and employees, said that the company is a law-abiding organisation, fully compliant with all laws.

The storm was kicked off by a post from short-seller group Hindenburg, which shared the news of the US Federal Court’s indictment of Gautam Adani and seven others associated with the company.

Billionaire Gautam Adani has been charged by US prosecutors for allegedly being part of a scheme to pay over USD 250 million (about Rs 2,100 crore) bribe to Indian officials in exchange of favourable terms for solar power contracts.

The press release from the US court elaborated on the allegations and claimed that the company and its leadership had indulged in mass bribery activity, in which the company bribed Indian officials to bag a contract for its Adani Green Energy company.

This in turn led to misleading American investors and global financial investors.

The court reportedly also issued an arrest warrant against Gautam Adani and seven others.

Adani Shares Tank

In the aftermath of the report, Adani Group company shares tanked at Dalal Street. With Adani Enterprises shares hitting the lower circuit, losing 20 per cent of their value. The situation was the same with the other Adani stocks, including Adani Green Energy, which is in the middle of the new storm.

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Business

Bharat NCAP Awards 5-Star Crash Test Rating to Mahindra Thar Roxx

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The Mahindra Thar Roxx has earned a prestigious 5-star rating in Bharat NCAP’s latest crash tests, reflecting its commitment to safety. Recently evaluated under stringent testing, the SUV excelled with a 31.09 out of 32 score for adult occupant protection and 45 out of 49 for child safety.

Tested in its AX5L and MX3 variants, the Mahindra Thar Roxx delivered notable results, scoring 15.09 out of 16 in the Frontal Offset test and a perfect 16 out of 16 in the Side Impact test. The assessment revealed strong protection for most areas, with adequate ratings for the driver’s chest and lower legs.

The Mahindra Thar Roxx has received high marks for child occupant safety, scoring 24 points in Bharat NCAP tests, along with 12 points for CRS (Child Restraint System) installation and a Vehicle Assessment Score of 9. This top-tier safety rating applies to all Thar Roxx units produced from November 2024 onward, underscoring Mahindra’s dedication to enhancing safety features across its SUV range. Additionally, Mahindra’s XUV400 and 3XO models have also achieved 5-star safety ratings, further emphasizing the automaker’s commitment to robust safety standards.

The Mahindra Thar Roxx offers two interior themes – Classic Ivory and a new Dark Mocha Brown. Comfort and convenience are prioritizing with ventilated seats, leatherette upholstery, a digital driver display, a larger 10.25-inch touchscreen, a high-quality Harmon Kardon sound system, a panoramic sunroof, rear AC vents, wireless connectivity for Apple CarPlay and Android Auto, and a six-way adjustable driver’s seat, combining practicality with luxury.

Mahindra Thar 5-door comes packed with safety and interior upgrades to enhance its appeal. On the safety side, it includes essentials like six airbags, three-point seatbelts for all occupants, hill control features, electronic stability control, and a seatbelt reminder. Advanced driver-assist features, such as autonomous emergency braking, adaptive cruise control, lane-keeping support, lane departure alerts, and a 360-degree camera system with blind spot monitoring, add an extra layer of protection.

Mahindra Thar Roxx offers two engine choices: a 2.0-litre turbo-petrol and a 2.2-litre diesel. The petrol engine comes in two setups—150 bhp and 330 Nm of torque for the manual, and 174 bhp with 380 Nm for the automatic. The diesel option is available only with four-wheel drive.

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Business

Why The Indian Stock Market Struggled: Inflation, FPI Outflows, And Currency Pressure; Everything You Need To Know

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The Indian stock market on Wednesday (November 13) wrapped the another challenging day, marking the fifth consecutive session of losses.

The Sensex and Nifty, the two benchmark indices, both ended lower amid concerns over inflation and a broad selloff in metal stocks.

Market Snapshot

By the close of the trading session, Sensex was down by 984.23 points, or 1.25 per cent, ending at 77,690.95. Nifty 50 followed suit, shedding 324.40 points, or 1.36 per cent, to settle at 23,559.05.

The day saw a sea of red on both the Sensex and Nifty, with the majority of stocks ending lower. Among the few gainers were NTPC, Tata Motors, and Infosys, which saw minor upticks on BSE.

However, the broader market was dominated by heavy losses, especially in stocks such as JSW Steel, State Bank of India (SBI), Adani Ports, Mahindra & Mahindra (M&M), and Tata Steel, all of which posted declines.

Reasons behind the sharp decline

One of the major factor contributing to the market’s downward trajectory is the growing concern related to inflation.

As per the data which released by the Ministry of statistics and Programme Implementation regarding the India’ retail inflation, it showed that for the month of October, it surged to 6.21 per cent, breaching the Reserve Bank of India’s (RBI) upper tolerance limit of 6 per cent for the first time in over a year. The primary factors that contributed to surge include rise food prices, driven by the extended monsoon season and crop damage.

Adding to the pressure is the continued outflow of foreign portfolio investments (FPIs). On November 12, FPIs sold shares worth Rs 364.35 crore, bringing the total outflows for November to Rs 23,911 crore

The Indian rupee also struggled on November 13, weakening by 1 paisa to close at 84.38 against the US dollar.

The rise of the US dollar, which surged 1.8 per cent in November, has been exacerbated by the US presidential election result and higher bond yields. The US 10-year bond yield spiked to 4.42 per cent, further diverting capital away from emerging markets like India.

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