mumbai reduce rates or continue to face a slowdown that seems to be the message the reserve bank of india rbi has sent out to developers with an increase in repo rate by a huge 50 basis pointsrbis movethe second time in a monthandahalfwill see a hike in monthly outgoings of home loans making the purchase of flats more expensive with sales dropping developers will be under pressure to reduce rates by 1520 in few months real estate consultants believean individual seeking a home loan of rs 10 lakh will now pay an emi of rs 1335 up from the current rs 998 the hike will add to developers funding woes in the past few months stock markets have not been receptive to real estate companies raising money banks are reluctant to lend and private equity funds besides being expensive are careful about projects they invest incouple with these issues presales are slowing as there is a delay in project approvals developers are bound to feel the pressure and the only way they can improve their financial situation will be to reduce prices said pranay vakil chairman knight frank global property consultants developers whose projects are ready or close to completion and whose repayments are due could be the first to reduce flat prices by 1520 said vakil developers are currently quoting 15 less for newlylaunched projectshowever there is a catch projects in which developers have a joint venture agreement with the landowner will not reduce rates as against those who have to still pay for the land they had purchasedparas gundecha president maharashtra chamber of housing industry agreed with vakil depending on their financial stability some developers may be forced to reduce rates but this will not continue in the long run we will be forced to slow down our work instead of allowing a situation to rise it would be nice if banks can protect consumer interest by absorbing the interest hike said gundecha he said developers costs have increased in the past few months land prices are high construction costs including labour have increased and a high premium was recently levied by the civic body this hike will only add to our capital costs gundecha addedaccording to piyush vora director rohan lifescape affordability will be a major issue it will be premature for us to say if there will be pressure on prices it depends on the stock available supply will be constrained as concessions are taken away still cost of capital has gone up and it will definitely impact investments vora addedlalit kumar jain national president confederation of real estate developers associations of india credai said the interest rate hike will be counterproductive and give rise to inflation buyers will still be wary of buying dream houses and developers will find it difficult to tap funds with reasonable interest the industry is facing a crunch and the fund gap over five years will be as high as 70 billion the rbi announcement could be detrimental to