FM Nirmala Sitharaman Bats For Rate Cuts: 'Eagerly Awaited...' Say Realtors | EXCLUSIVE

Finance Minister Nirmala Sitharaman while speaking at the State Bank of India Banking and Economics Conclave, batted for more affordable interest rates for loans. The increase in interest rates has a cascading impact on the economy, with construction and real estate being one of the key industries at the receiving end.

What Do Real Estate Moguls Have To Say?

The suggestion for rate cut is welcome by and large by real estate developers. Sanjay Sharma, Director, SKA Group, says, "A rate cut by the RBI has been eagerly awaited not just by the real estate sector but also by prospective homebuyers across the country.” Lowering the repo rate directly translates into reduced home loan interest rates, making home ownership more affordable for end consumers. This, in turn, could significantly stimulate demand, particularly in the affordable housing segment, as more individuals are encouraged to invest in property. "Such a move would not only boost buyer confidence but also provide the much-needed momentum for the sector’s growth." Sharma said.

Such a step could act as a catalyst for renewed confidence across the sector, aligning well with the government’s vision of ‘Housing for All’. Ravindra Gandhi, Managing Director of Tirasya Estates, "It would provide a much-needed impetus to project financing, enabling faster project completions. This could act as a catalyst for growth, particularly in markets where affordability and financing are key drivers of real estate transactions.”

Impact on Luxury Housing Buyers and Sellers

Global wealth portfolios are on an upswing following a post-pandemic fall, with the global luxury market seeing a $1.5 trillion-plus gain in 2023, said 'Perspective Properties by Forbes' 2023 report.

"This growth is prompting many affluent individuals to strategize their investments with a long-term vision, focusing on creating lasting legacies and securing financial stability for future generations. Heritage brands are increasingly entering the development space." said the report.

While luxury home buyers are usually immune to the fluctuating interest rate, many affluent individuals see it as a way to park money. Amit Modi, Director, County Group, says,  “The effect on the luxury housing segment will not be much." However, Rajjath Goel, Managing Director, MRG Group, believes there will be an impact on the luxury market like it is in the non-luxury segment, “The impact on the luxury housing market is particularly noteworthy. Lower borrowing costs can provide developers with greater financial flexibility to innovate and deliver high-end projects, while also making premium homes more accessible to affluent buyers."

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