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RBI’s pandemic rate cuts give the biggest stimulus to realty
April 21, 2022
Real estate turned out to be the greatest beneficiary of the Reserve Bank of India’s (RBI) aggressive rate slices and liquidity push through the pandemic, with commercial properties reporting a financing cost shrinkage of 283 premises focuses nearly three times the decrease in official policy rates. One premise point is 0.01%.
In response to the unprecedented lockdowns, the RBI reduced policy rates by 115 basis points, making the cost of financing hit the lowest on record.
On average, the repo rate stayed at 4%, but loans for commercial real estate averaged around 7.14% toward the end of February 2022. Moreover, housing loans additionally saw rates drop by 129 basis points.
Unsecured loans saw rates decline 218 basis points. Trade and agriculture got the least benefits at 5 and 64 basis points, respectively.
“Our conversations with lenders in recent months suggest an extremely high level of bullishness,” said MB Mahesh, director, Kotak Securities. “This implies that they are probably going to go down the risk curve, and borrowers are still quite wary to take credit.”
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