Telangana Real Estate May Bounce Back After RBI’s Key Decision!

For the past two years, there has been a stagnation in the real estate market. Not just in the Telugu states, but this has been the situation across the country. In addition to market conditions, the decisions taken by the government in Telangana have also had a significant impact on the real estate market. Overall, it is clearly visible that the demand in real estate over the past two years has decreased compared to previous years. Although high-end apartments and premium segment houses were not greatly affected, the mid-range and other segments have been significantly impacted. Due to the decision taken by the Reserve Bank of India (RBI) on Friday, there are expectations that the real estate market might recover to some extent. Especially, one reason is that the EMIs of those who have already purchased homes will come down… and for those intending to buy new houses, the burden is expected to reduce. In the monetary policy announced by the RBI on Friday, the repo rate has been reduced by 50 basis points. After reducing the repo rate by 0.25 basis points twice earlier this year, this time the RBI has reduced it by a straight 50 basis points, which has become a key development. With this latest decision, the repo rate has now come down from 6 percent to 5.50 percent.

It is known that the repo rate is the interest rate charged by the RBI on the amounts lent to banks. Therefore, when the RBI increases the repo rate, interest rates go up… and when it reduces the rate, the interest rates come down. Since inflation is under control, this decision seems to have been taken to encourage the growth rate. There are expectations that reducing the repo rate by 50 basis points could lead to some increase in demand in the real estate sector. Especially in the mid-range and affordable price segments, there is a possibility of demand picking up. Since loans will now be available at lower interest rates, this can also be seen as a relief for developers. To what extent the RBI’s latest decision will boost the real estate market remains to be seen in the coming days. Along with the repo rate, CRR has also been reduced, which will lead to an increase in cash reserves available in the market.