 "affordable Housing, budget homes, real estate, residential property")
The RBI's decision to hike the benchmark interest rate will make home loans costlier and affect housing sales, especially in affordable and mid-income segments, according to property consultants.
The RBI on Wednesday hiked the key benchmark rate by 50 basis points.
Property consultancy firms Anarock, Knight Frank India, JLL India, Colliers India, India Sotheby's International Realty and Investors Clinic said that the RBI's move was on the expected line to control inflation and this would result in an increase in interest rates on home loans.
Anarock Chairman Anuj Puri said: "The rate hike will push up home loan interest rates, which had already begun creeping upward after the surprise monetary policy announcement last month".
Interest rates will remain lower than during the global financial crisis of 2008 when they went as high as 12 per cent and above, he said.
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"Nevertheless, the current hike will reflect in residential sales volumes in the months to come, more so in the affordable and mid-segments," Puri pointed out.
He noted that the housing market is still largely end-user driven.
"...So, there is no investor mindset seeking the lowest possible entry point. Genuine demand comes from an underlying aspiration for homeownership," he observed.
Puri said the hike in repo rate was inevitable.
"...but, we are now entering the red zone. Any future hikes will reflect markedly on housing sales," he added.
Colliers India CEO Ramesh Nair is expecting banks to gradually pass on this rise in repo rate in the form of higher home loan rates in the coming months.
He advised homebuyers to take advantage of the prevailing home loan rates, with housing prices expected to rise.
Dhruv Agarwala, CEO of Housing.com and PropTiger.com said: "The twin rate hikes by the apex bank would ultimately result in home loan interest rates going up, thereby impacting buyer sentiment".
Knight Frank India CMD Shishir Baijal said home loans are set to get costlier.
"Rising interest rate along with elevated property construction cost and product price pressures could adversely impact the real estate buyer's sentiment," Baijal felt.
India Sotheby's International Realty CEO Amit Goyal said he doesn't see any major impact on the demand side in the housing market, which continues to remain strong.
Goyal hoped inflation to cool down by the year-end, enabling the central bank to revert to a lower interest rate regime.
Samantak Das, chief economist, and head of research and REIS, India, JLL, said, "The rise in policy rate is expected to act more as a sentiment disruptor for the home buyers, given that mortgage rates are likely to inch up".
"Affordability remains high and buying momentum is expected to remain largely intact," Das added.
Investors Clinic founder Honeyy Katiyal said that hike in interest rates will hurt the real estate sector the most. He hoped for a stable interest rate regime.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
