{"id":3247,"date":"2011-09-30T02:34:03","date_gmt":"2011-09-29T21:04:03","guid":{"rendered":"http:\/\/www.bharatestates.com\/blog\/?p=3247"},"modified":"2020-06-15T04:59:18","modified_gmt":"2020-06-14T23:29:18","slug":"recent-interest-rate-hike-by-rbi-causing-mixed-reactions","status":"publish","type":"post","link":"https:\/\/www.bharatestates.com\/blog\/recent-interest-rate-hike-by-rbi-causing-mixed-reactions\/","title":{"rendered":"Recent Interest Rate Hike by RBI Causing Mixed Reactions"},"content":{"rendered":"

\"\"What to call a hike in the real estate prices, Reality growth or positive movement or a hard slap on the face of end user? Once again RBI has hiked the interest rate by 25 basis points. It will directly affect the cost of borrowing for developers. Where are we going actually? The decision to hike the interest rate was taken to curb the inflation but if we see the past results of raising the interest rates which didn\u2019t work and still no lesson is learnt. Things are getting complicated. There are mixed reactions in the market regarding the future of real estate industry in India<\/a>.Developers:<\/strong>Big developers are not welcoming this rise in the rate of interest by RBI as they feel it will increase the cost of properties. The cost of construction is getting higher with the shortage of labour and increased input cost which is already on the continuous rise due to inflation. They are left with no choice but to pass on this hike to the end user. It may affect the demand directly as expected by some developers but few developers are still positive about the demand for properties in the market in the festive season.Small builders:<\/strong>The recent decision of RBI has hit the small builders and developers hard because of fund shortage they may have to put their projects on hold. The situation is worse than we think. Many of them have to go out of business soon as they won\u2019t be able to complete their projects<\/a>, rising cost of construction and labour is another constraint. Apart from these buyers will not trust them as the possession is not guaranteed and thus they have to lose their reputation as well. It will certainly be difficult for them to find takers of their products.Investors:<\/strong>Many people in the country and outside country buy properties<\/a> for purely investment purpose. But the current rise in the interest rate will add to lower the demand because an investor won\u2019t like to put his money when the prices are sky mounting and the home loan are unexpectedly high and there is no guarantee of possession date. In such a scenario an investor would like to hold his\/her decision to invest in real estate due to the negative sentiments.End user:<\/strong>It is really difficult for first time buyers to afford such an expensive property that too on a high rate of interest. Salaries of upper middle class or middle class are not rising with the speed of property prices or interest rate. That is why affordability issue comes here and inflation is making things worse for such people who are on a tight monthly budget. I guess they would hold their decision to buy property and will continue to prefer rented accommodation.Land\/plot buyers:<\/strong>It is true that property buyers will definitely think twice before putting their heads into the hole but one party is there which is not as affected as others. The land buyers will certainly buy land. There won\u2019t be any issue of demand rise or low in that.Market experts:<\/strong>It is believed by some experts of real estate<\/a> industry that this hike in borrowing cost will not affect the demand as much as it is expected because the prices are continuously rising. In the last one year the prices already gone up by 15 to 20 percent and in some locations it is even more. The festive season is going on and Indians do believe in buying properties on auspicious occasions like Navratri, Dassera and Diwali. Usually this time of year there is a rise in demand by 30 to 40 percent. This year it may not be that much but the demand will be there from the actual users. The mantra behind it can be \u201cNow or never\u201d as the prices are consistently on the upward direction. Only the time will tell us whose prediction is right and whose wrong.Expected price rise:<\/strong>It is expected that there will be 30 to 50 percent rise in the property prices in coming time as a result of hike in interest rate by RBI. It is not a good sign for prospective buyers who are end users of the property. most of the builders and developers<\/a> are experiencing short of sale of units by 60 to 70 percent but are expecting this festive season can see a bit rise in the demand. The home loan rates are also rising sharply. In the last 18 months there is a 4 to 5 percentage point rise in the rate of interest in home loan.Impact:<\/strong>The actual user of property will buy a property<\/a> that is ready for possession or put his money where it is guaranteed to get possession on a fixed time like in case of reputed builders and developers\u2019 projects, a property that is closer to possession date or in plot\/land. The things will change with the mixed market sentiments. If we talk about the upcoming construction activities then we must agree with the fact that it will certainly slowdown the speed as the small developers may opt to get out of business.Ruchi Mahajan<\/p>\n

Check Real Estate Prices<\/h2>\n

– Pune Property Prices<\/a>, Goa Property Prices<\/a>\u0437\u0430\u0439\u043c \u043d\u0430 \u043a\u0430\u0440\u0442\u0443 \u0431\u0435\u0437 \u043e\u0442\u043a\u0430\u0437\u043e\u0432 \u043a\u0440\u0443\u0433\u043b\u043e\u0441\u0443\u0442\u043e\u0447\u043d\u043e<\/a>\u0432\u0437\u044f\u0442\u044c \u043a\u0440\u0435\u0434\u0438\u0442 \u043e\u043d\u043b\u0430\u0439\u043d<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

What to call a hike in the real estate prices, Reality growth or positive movement or a hard slap on the face of end user? Once again RBI has hiked the interest rate by 25 basis points. It will directly affect the cost of borrowing for developers. Where are we going actually? The decision to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[447,433],"tags":[],"class_list":["post-3247","post","type-post","status-publish","format-standard","hentry","category-realty-guide","category-tips"],"blocksy_meta":[],"yoast_head":"\nRecent Interest Rate Hike by RBI Causing Mixed Reactions -<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bharatestates.com\/blog\/recent-interest-rate-hike-by-rbi-causing-mixed-reactions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Recent Interest Rate Hike by RBI Causing Mixed Reactions -\" \/>\n<meta property=\"og:description\" content=\"What to call a hike in the real estate prices, Reality growth or positive movement or a hard slap on the face of end user? 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