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Here are some reactions of realtors on RBI’s policy outcome on realty sector

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The Reserve Bank of India on Wednesday raised the key lending rate or repo rate by 50 basis points to 4.9 per cent to tame rising inflation, which has been now above the central bank’s 6 per cent tolerance level for four months in a row.

Repo rate is the rate at which the central bank lends short-term funds to banks.

In line with the rate hike by the RBI, some banks and non-banking finance companies too had raised their lending rates, which will essentially lead to an increase in EMIs for borrowers.

On Wednesday, RBI decided to increase the existing limits on individual housing loans by cooperative banks.

Accordingly, the limits for Tier I or Tier II urban cooperative banks shall stand revised from Rs 30 lakh or Rs 70 lakh to Rs 60 lakh or Rs 140 lakh, respectively, which essentially means doubling of the limit.

The increased limits will apply for Primary (Urban) Co-operative Banks (UCBs), and Rural Cooperative Banks (RCBs) — State Cooperative Banks and District Central Cooperative Banks.

For RCBs, the limits will increase from Rs 20 lakh to Rs 50 lakh for such banks with assessed net worth less than Rs 100 crore; and from Rs 30 lakh to Rs 75 lakh for other such RCBs.

Besides, considering the growing need for affordable housing and to realise their potential in providing credit facilities to the housing sector, the RBI decided to allow State Co-operative Banks (StCBs) and District Central Co-operative Banks to extend finance to Commercial Real Estate – Residential Housing (CRE-RH) within the existing aggregate housing finance limit of 5 per cent of their total assets.

Following are some of the reactions from real estate experts and developers on the RBI’s measures:

Rohan Pawar, CEO of Pinnacle Group said, during the pandemic, the low interest rate regime had boosted the housing demand, and RBI’s decision to hike the interest rate again by 50 basis points to 4.90 per cent was expected to tackle the tight inflation of the country.

“The increase of rates could adversely affect housing demand because of increased EMIs and lower eligibility on home loans. This will create an impact on the ongoing growth momentum in the sector in addition to increasing input costs. However, we still believe that preference of homebuyers for owning a home will continue to boost demand.”

Niranjan Hiranandani, Vice Chairman of NAREDCO said, taming steep inflation hike is a preordained measure by RBI, given the global economic ballgame. Soaring commodity prices especially with food and energy prices, plummeting currencies, supply side shocks are the foremost reasons for rising input cost.

“It is evident that home loan interest rate hike will impair the home buying rally as pay out in terms of EMI is scheduled to rise. But according to me this crater in demand sentiment is a makeshift move, as home loans are based on floating rate for a long tenure. The EMI constraint will be eased as rates are expected to normalise once the global situation is stabilised.”

The hike in the limit of individual loans by co-operative banks by 100 per cent is a welcome initiative for home buyers who opt for home loans from co-op banks.

Atul Goel, MD of Goel Ganga Group said, the RBI’s step to increase the repo rate has been on the expected lines. To curb inflation, the regulatory bodies in India were required to control liquidity circulation in the economy. For a few months, the inflation rate has been above 6 per cent, which is beyond the RBI’s safe zone.

“If not controlled, the inflationary pressure could destabilise an otherwise bullish Indian economy. Although the recent step will increase the home loan rates, an unstable economy is not conducive to the overall health of the real estate industry. For the industry to operate optimally, it is important that the economy continues to grow in a stable, inclusive, and steady fashion.”

Suren Goyal, Partner at RPS Group said, the group welcomes the step of the apex body to increase the overall repo rates and believes it will help in clamping down inflation and smoothen economic growth.

“A rise in inflation can soften the stance on an otherwise robust real estate industry. Already raw material prices are increasing and an unbridled rate of inflation will further drive the input costs northwards, therefore resulting in cost overruns for the developer fraternity.”

Manoj Gaur, CMD of Gaurs Group and President- CREDAI NCR said it has been a fine balancing act by RBI.

“We understand that the hike in repo rate by 50 basis points will impact interest rates of consumer loans and make home loan dearer right at the time when real estate sector was coming out of the throes of pandemic and affect sales in the short term. However, by reining in inflation it will ultimately benefit the real estate sector that is bogged down by high input costs.”

Amit Modi, President of CREDAI Western UP opined that the increase in the repo rate will hamper the sentiments of the buyers, especially first time home buyers who are heavily reliant on home loans.

“It will be a barrier to the growth trajectory of the revived sales post-Covid. Millions of homebuyers will be sidelined and alienated from the property markets after the hike. It will slow down the pace of sales that has taken a rise in the recent past.”

Pradeep Aggarwal, Chairman of Signature Global (India) said the repo rate hike could be termed as a reformative move, the stated aim was clear in current macro and micro economic conditions.

“There was no other option left but to rein in inflation through monetary control measures. This might slightly influence real estate, but it will not impact consumer confidence or demand. Simultaneously, increasing the 100 per cent limit of individual loans by apex bank for co-operative banks, would surely spread a positive communication among each stakeholder.”

Sanjay Sharma, Director of SKA Group said the repo rate hike comes at the time when there was a renewed buyer interest in every segments of the real estate

“This move will definitely have an impact on buyers’ sentiments but at the same time let’s wish that the step brings the expected relief and benefits the sector that is also reeling from high input costs on account of various factors including inflation.”

Dharmesh Shah, CEO of Hero Homes said that there will also be a certain increase in home loan rates that will backtrack home buyers’ aspirations to invest in property markets and impact residential sales for a short period of time.

Prateek Mittal, Executive Director at Sushma Group said the latest move will definitely help the country as well as benefit the real estate sector that is already battling high input costs on account of various external factors and the consequent increase in fuel cost.

“Though this increase will also impact the buying power of consumers, we feel the impact will be taken in stride.”

According to Sharad Mittal, Director and CEO of Motilal Oswal Real Estate Funds: “Now with mortgage loan rates set to go up, we may notice a slight demand blip in the short term but overall outlook on the sector remains strongly bullish in the long term.”

“In an interesting move, RBI has now allowed rural co-operative banks to lend towards residential housing projects. This will help improve much-needed liquidity in the sector.”

National

J&K CM Omar Abdullah makes passionate appeal for statehood restoration

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Jammu, June 6: During his welcome address to Prime Minister Narendra Modi in Jammu and Kashmir’s (J&K) Katra town on Friday, Chief Minister Omar Abdullah made a passionate appeal for restoration of statehood.

During his welcome speech for the Prime Minister, CM Omar Abdullah said, “Jenab-e-Wallah (exalted sir), when you inaugurated the Katra railway station towards the end of my first term as the Chief Minister, Manoj Sinha ji was the Union Minister of State for Railways.

“He has been promoted as the Lieutenant-Governor while I have been demoted from the Chief Minister of a state to that of a Union Territory. I am confident that your goodself will soon address the issue and announce statehood to J&K”.

He also praised the Prime Minister for making the dream of a rail link to the Valley a reality.

“I was in class 8 and since then I have been hearing about a rail link to the Valley. The dream has been realised in your time sir.

“The start of the train service to the Valley will save us from the loot of the airlines companies who hike airfare to Jammu from Rs 5,000 to Rs 25,000 whenever the Srinagar-Jammu highway gets blocked.

“I must also pay my gratitude to Atal Bihari Vajpayee, who declared the rail link to the Valley a national priority project and made financial allocations for it,” CM Omar said.

On the stage with PM Modi, CM Omar’s body language was very cordial as the PM engaged him in some close to ear talk.

He was also in the forefront of all the official functions on Friday, including the inauguration of the Chenab Railway Bridge, the Anji cable stayed railway bridge, the flag-off ceremony of two Vande Bharat trains, one from Katra to Srinagar and the other from Srinagar to Katra.

CM Omar was among the dignitaries who welcomed the PM on the stage before the latter’s address to the public in Katra stadium.

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Business

RBI reduces inflation forecast to 3.7 pc for 2025-26

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Mumbai, June 6: The RBI has revised its inflation outlook for 2025-26 downwards from the earlier forecast of 4 per cent to 3.7 per cent, Reserve Bank Governor Sanjay Malhotra said on Friday.

Taking all these factors into consideration, and assuming a normal monsoon, CPI inflation for the financial year 2025-26 is now projected at 3.7 per cent, with Q1 at 2.9 per cent, Q2 at 3.4 per cent, Q3 at 3.9 per cent, and Q4 at 4.4 per cent.

He pointed out that Inflation has softened significantly over the last six months from above the tolerance band in October 2024 to well below the target, with signs of a broad-based moderation. The near-term and medium-term outlook now gives us the confidence of not only a durable alignment of headline inflation with the target of 4 per cent, as exuded in the last meeting, but also the belief that during the year, it is likely to undershoot the target at the margin.

While food inflation outlook remains soft, core inflation is expected to remain benign with easing of international commodity prices in line with the anticipated global growth slowdown, Malhotra explained.

He pointed out that CPI headline inflation continued its declining trajectory in March-April, with headline CPI inflation moderating to a nearly six-year low of 3.2 per cent (y-o-y) in April 2025. This was led mainly by food inflation, which recorded the sixth consecutive monthly decline.

Fuel group witnessed a reversal of deflationary conditions and recorded positive inflation prints during March and April, partly reflecting the hike in LPG prices. Core inflation remained largely steady and contained during March-April, despite the increase in gold prices exerting upward pressure, Malhotra said.

The outlook for inflation points towards benign prices across major constituents. The record wheat production and higher production of key pulses in the Rabi crop season should ensure an adequate supply of key food items. Going forward, the likely above normal monsoon along with its early onset augurs well for Kharif crop prospects.

Reflecting this, inflation expectations are showing a moderating trend, more so for the rural households. Most projections point towards continued moderation in the prices of key commodities, including crude oil, the RBI Governor said.

However, at the same time, Malhotra had a word of caution. “Notwithstanding these favourable prognoses, we need to remain watchful of weather-related uncertainties and still evolving tariff-related concerns with their attendant impact on global commodity prices,” he added.

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International

Man shot in targeted attack in Australian state of Queensland

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Sydney, June 6: A man has been hospitalised with serious injuries following a targeted shooting in the Australian state of Queensland.

The Queensland Police Service said on Friday that emergency services were deployed to a house in Parkwood, 65 kilometres southeast of Brisbane, around 7:50 p.m. on Thursday in response to reports that a man had sustained gunshot wounds to his leg and other injuries to his hand.

According to media, the 21-year-old man was found at the scene with serious injuries and was taken to hospital in a stable condition.

A police statement said that initial inquiries indicated that the incident was a targeted shooting and that there was no ongoing threat to the public.

An investigation into the attack was ongoing and police commenced a search for the perpetrator.

In a separate incident, Australian police are investigating a fatal stabbing in a remote outback mining town west of Sydney.

Emergency services were called to conduct a welfare check at a home in Broken Hill, over 900 kilometers from Sydney in the far west outback of the state of New South Wales (NSW), just after 11:50 p.m. on Thursday.

Police officers arrived at the scene where they found a man, believed to be aged in his 40s, with stab wounds to his neck.

He was treated by ambulance paramedics but could not be revived and was declared deceased.

Local police established a crime scene at the house and have commenced an investigation into the man’s death with assistance from the NSW Homicide Squad.

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