The Reserve Bank of India (RBI) has cut the repo rate by 25 points for the third time since January. What is the repo rate and how will it affect your investment plans this year? This article explains the concept of repo rates and explores its effects on one of Bangalore’s hottest localities, Whitefield.
Repo rate is the interest rate at which the RBI lends money to other banks. When the repo rate decreases, like it has now, it impacts the economy in a number of ways. The RBI, in an effort to curb inflation, has cut the repo rate by another 25 basis points. This is the third such cut this year and the repo rate now stands at 7.25%. Let’s take a look at what effect this is going to have on the real estate market in Whitefield.
1. A Quick Overview of Whitefield
Let’s first take a quick look at the Whitefield locality in general. Whitefield’s real estate market has flourished ever since the IT boom. The area is perfect for the droves of employees who work at the many IT companies in the area because of its prime location. Whitefield also has a number of malls and retail outlets, which add to the real estate value.
It is a well-connected locality and has easy access to the Whitefield railway station and the international airport. What’s more, the Namma Metro project will provide Whitefield with another convenient transport option that connects it with the rest of Bangalore.
2. Lower Repo Rate Means Lower Housing Loan Rates
When the repo rate is cut, banks transfer this advantage to the customer by decreasing the interest rates on their own loans. Because of this, real estate in Whitefield is automatically going to receive a boost. Prospective homeowners now have greater incentive to take loans and use this to purchase land or houses.
Many banks have already announced lower interest rates and more are expected to follow suit. This is great news for you if you’ve been holding off in purchasing property and waiting for interest rates to dip.
3. Infrastructure Development Will Speed Up
Builders are also going to speed up development because of the reduced interest rates. This is going to bring in more people to the locality, which in turn, is expected to further boost the rate of development. This is not only in relation to housing projects, but also general infrastructure as well.
BBMP has recently announced that they’ve set aside a large sum of money to give Whitefield a facelift. The area seems to have everything going right for it at the moment.
4. More and Cheaper Amenities
Corporate retail entities will also benefit from this influx of development and consumers. This means that they will be able to expand and provide better services. More commercial growth is expected to take place in Whitefield, which works in the favour of the real estate market here.
To sum up, the real estate market in Whitefield is going to benefit greatly from lowered repo rates and times are looking good for investors in the area.
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