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Below is the Quote on MPC expectation by Mr. Shishir Baijal, Chairman & Managing Director, Knight Frank India.

The RBI stays committed to control inflation and bring it closer to the comfort level of 4% by continuing to increase the repo rate and tightening the liquidity condition. Although, global crude and commodity prices have softened a bit, revival in domestic demand along with sharp rupee depreciation would continue to exert price pressures leaving no choice for the RBI but to raise REPO Rate by another 50 BPS taking the total rate hike since May 2022 to 190 BPS.  While this is expected in line with the global trend, it will have its impact on the sentiments across all buying categories, especially in the wake of the current festive season.

Tight liquidity conditions along with the repo rate hike would lead to a significant rise in the cost of funding, impacting home loan rates as well. Going by the current trends we expect about 50% of this will be passed onto the home loan borrowers. A rise in home loan rates will further impact affordability across the markets. As per Knight Frank affordability index will deteriorate by another 2%  This might slowdown home buying decision for a short to medium term. However, we hope, India’s steady economic growth and revival in consumer’s sentiment towards the economy will bring back confidence amongst the end users and support their home buying activities.

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