Real-estate industry in Ahmedabad is feeling the heat of the economic pressures, with inflation and now the interest rate hikes. According to sources, several industry players have appealed to the government to make special provisions for people looking for a residence in affordable housing segments. This segment makes up rather a huge chunk of the market and as such is affecting the industry. Nevertheless, the premium housing sector has not been affected much.
With prices of raw materials rising and also higher interest rates, demand for houses has dropped in the city significantly. The scenario is such that people who were browsing for houses have also decided to delay making the investment.
Reserve Bank of India (RBI) in June raised the policy repo rate by 0.5%, or 50 basis points, bringing it to 4.90%. In May, the repo rate was raised by 40 basis points. As such, in just the past two months, the repo rate was hiked by 90 basis points. According to the current rate, a buyer would have to pay a yearly installment that is higher by Rs20,000 to Rs40,000 on a house that costs between Rs25 lakhs and Rs50 lakhs. For people looking for affordable homes, this reality is a deal-breaker.
Experts believed that the government must discuss and offer some relief, at least for the customers of the affordable housing segment. This is the segment that has been most affected and is truly struggling in the market.