A person buys a house when the prices as well as the interest rates on home loans are low. If both these factors are high, the demand for real estate would still exist, but the buyer is likely to postpone his decision. As a home loan is taken for a long period of 15-20 years, the buyer knows that at some point of time, the floating interest rate will either go up or down.

There have been 12 rate hikes in the past year or so and experts are talking about another one now. How will this impact the market?

We have come to a stage, where the RBI moves are producing a negative impact on the economy rather than containing inflation. The rise in the interest rate is actually increasing the cost of production which, in turn, is boosting inflation.

Another important aspect is that while the world is growing at a rate of just 2-3%, India is among the few countries that are growing at 7%. If India goes into a recession at this stage, the RBI does not have too many instruments to help pull it out, and this will make it difficult to stop the slowdown.

We, on the behalf of industry bodies, such as the Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI) and the Indian Merchants' Chambers (IMC), have been making regular representations to the Finance Ministry and the RBI against any further hikes in interest rates, which would hamper the growth.

If another rate hike cannot be avoided, it should be in the form of a selective credit policy, wherein certain sections, such as the equated monthly instalments (EMI) paid by borrowers on their home/auto loans, should be beyond the purview of the policy. This move would not only benefit lakhs of loan takers but, in turn, give a big boost to the construction and the auto industry.

A large percentage of annual property sales happen during the festive season. Has this season been slower than those in the previous years?

It's a wrong notion that people purchase property during the festive season. Actually, the purchase is done much earlier; it is only concluded during this time. So, the possession of the flat is taken on a specific date or its registration is done on a particular day. Festive offers have never prompted sales of real estate projects. It's only the white goods that register healthy sales during festivals.