Rising rates set to defer homebuying and opt for rental accommodation
The Reserve Bank of India’s (RBI’s) fourth successive hike of the repo rate last week by 50 basis points (bps) is expected to push certain prospective homebuyers to defer immediate plans to purchase property and opt for rental accommodation over the next few quarters.
As expected, the central bank hiked repo rates on Friday in an effort to contain inflation and provide support to the currency. With this hike, the rates have gone up by 190 bps, cumulatively, in the last five months. This was followed by the two biggest mortgage lenders, Housing Development Finance Corporation and LIC Housing Finance, revising interest rates upwards immediately.
