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RBI increases repo rate: Will it further hurt Gurgaon's already slowing real estate market?
To tame inflation and bring the economy under control, RBI has increased the reverse repo rate. As a result banks may now probably increase the interest rate for various loans including home loans.

The Gurgaon real estate market was anyway going through a dull phase over the last few months. Just when the experts were predicting a turnaround, the rise in interest rate came. Will this pull down the real estate market of the silicon city even further down?

Here's what the various real estate players of Gurgaon have to say on the latest hike in repo rate?

David Walker, Executive Director, SARE Homes:

“The repo rate increase is designed to reduce India's persistently high inflation and also provide support to the currency. This will adversely affect demand in the short term, which is of concern given the slowdown in growth, but is required for price stability which brings with it higher medium to long-term consumption and investment.”

Aman Agarwal, Director, KV Developers:

“I do not think there was a need to raise the rate. It is evident that real estate sector has been struggling over the last few years. One of the major reason for this is a lack of ample support from the government policies. In a country like India where the largest chunk of market belongs to mid / upper mid level income group, banks play a major role in defining the buying behavior. This step by RBI would encourage banks to raise their lending rates, thereby impacting buyers’ decisions. RBI should understand that without a flexible credit facility, it will be difficult for this sector to grow. We appeal RBI to revise its decision in its next policy review.”

Prakash Bhagat, Vice-President- Sales and Marketing, Assotech Group:

“With the real estate industry in Gurgaon going through a sluggish growth, the news of RBI’s decision to increase the repo rate is a big blow to the new buyers who mostly rely on loans from the banks. This is not only going to affect the new buyers but also increase the EMI burden of the current buyers. Overall the sales demand of the builders and new buyers shall be badly affected. We are hoping the Governor of RBI to take some corrective measures immediately to bring cheers to the industry which is a major contributor to GDP and employment growth of India.”

Vineet Relia, Chief Operating Officer, SARE Homes:

“The recent rate hikes are aimed at reducing the inflationary pressure and provide support to the currency. These measures will bring in price stability, which will boost consumption and investment. The turnaround in the Gurgaon realty space is a certainty of its business cycle and we are upbeat about this. We are witnessing a good response to our award winning township in Sector-92, Gurgaon for our existing phases namely Green ParC – II and Petioles, as well as our new launch Club Terraces. Residents of these phases will be able to enjoy our star attraction, which is The SARE Club - one of Gurgaon’s finest clubs. Moving forward, we forsee a positive long term trend in Gurgaon.”

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