Godrej Believes that RBI’s Rate Hike Won’t Affect Real Estate Sector

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The Reserve Bank’s decision to raise its key short-term rates will not have any impact on the realty sector, a top industry player said. “Presently in the real estate sector, demand is exceeding supply, so I see no problem,” Godrej Group’s Chairman, Adi Godrej, told reporters at an event organised by the Gujarat Institute of Housing and Estate Developers (GIHED) here.
As a part of its first mid-quarterly review of monetary policy, the RBI had raised its key short-term lending (repo) rate by 25 basis points and borrowing (reverse repo) rate by 50 basis points to six and five per cent, respectively. The rate hikes are aimed at combating inflation now at a high 8.5 per cent, he said.
The rate hikes will also not impact credit flow adversely, the industrialist said. “Credit is available and I don’t see this RBI decision having any effect on credit availability,” he added. On the consumer durables segment, he said, the sector is growing by 25-30 per cent and will grow further during the festive season.
Asked if prices of some products were likely to rise going forward, Godrej said that prices of some products like soap could see a northward movement due to a rise in raw materials costs. “(Prices of) some products like soap may go up in the region of five per cent as cost of raw materials like vegetable oils have gone up,” he said.

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