RBI’s credit policy to boost residential realty growth

The Reserve Bank of India’s latest credit policy, keeping the interest rates unchanged , will keep the momentum of housing recovery going, leading to the growth of residential real estate in the coming months.

RBI in its November 2021 credit policy  kept the repo rate unchanged at 4 percent.while reverse repo rate was kept unchanged at 3.35 percent. The RBI had last revised its policy repo rate or the short term lending rate on May 22, 2020. to push up demand by cutting the interest rates to a historic low. RBI’s new monetary policy is in line with  its projection of GDP growth rate at 9.5 percent for the FY ’22. Under the new credit policy, the marginal standing facility has also been left unchanged at 4.25 percent. RBI has also retained flexibility to fine tune liquidity operations. It will allow banks to make one-time pre-payment with respect to TLTROs.

Says Pradeep Aggarwal, Founder & Chairman, Signature Global and Chairman, Assocham National Council on Real Estate, Housing and Urban Development, ” The RBI’s decision to continue with its accommodative stance to maintain the all time low home loan interest rates, bodes well for the recovery and growth of residential real estate. The low interest rates, together with range bound home prices and government’s record spending on boosting infrastructure will provide necessary momentum to housing growth.

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