BANGALORE: Real estate developers in the country’s IT hub today said RBI’s decision to hike key policy rates will have a marginal impact on demand sentiments in short term.
“There will be some impact as people were expecting that the interest rates will go down but on the other hand, suddenly to their surprise it has been increased, but I don’t think there will be a major impact,” K K Malpani, founding member of Confederation of Real Estate Developers’ Association of India (CREDAI) Bangalore told PTI here.
Stating that the Bangalore realty sector has been doing well due to quality, demand and rate factors, he said, “People are confident about quality of the property in Bangalore as the city is fast developing and climate is also favourable here.”
RBI had on September 20 raised the short-term policy rate by 0.25 per cent to keep inflation under check, a move that may increase EMIs for home and auto loans in the medium term.
Commenting on the market situation in the city, CREDAI Bangalore President C N Govindaraju said overheated markets like Mumbai, Gurgaon and NCR region have seen a slowdown and Hyderabad market is seeing a turbulent phase due to Telangana issue. All these factors have created a demand in Bangalore market.
“There are companies that are relocating to Bangalore, expansions have been planned in the city, there will be an influx of IT and other professionals into the city so there will be a demand,” he added.
Govindaraju said, “Due to increase in rates, sentiment will be marginally hurt, but in long term, as housing is a basic necessity — the impact is going to be short lived.”