Housing loan rate of interest plays a major role in determining the demand in real estate sector and with continuous increases, it had created havoc. With inflation at its peak, industry was expecting another hike from RBI side in its December 2013 monetary review policy but Honorable Governor of RBI, Shri Raghuram Govind Rajan surprised the industry by keeping the rates un changed. This has sent a very positive signal to the industry at large and banks like HDFC, SBI, ICICI immediately responded by lowering the rate of interest. This has also sent a signal to the home buyers that probably the era of increasing rates has come to an end and the journey forward will see the downward movement of the rate of interest, provided of course that inflation remains in control. Rate of interest not only brings down the EMI but also increases the eligibility of the perspective home buyer.
Also SEBI is moving forward in bringing the Real Estate Investment Trusts, popularly known as REITs in reality. This will bring the much required liquidity in the commercial Real Estate Sector.
We hope that this trend of positive news continues to bring cheer to the real estate industry and keep the growth going. If Real Estate grows, so does the economy as real estate supports around 300 ancillary industries and is the second largest employer in India after the agriculture.