Why did #NIFTYREALTY rally today? šŸ“ˆ

ā€¢ Today, RBI hiked the repo rate by 50 basis points.Following the recent boost, the repo rate increased by 0.9 percent, which is likely to raise the cost of home loans and vehicle loans.

ā€¢ Floating-rate loans will become more expensive, and all new loans will most certainly be priced higher. The equivalent monthly instalment (EMI) of a variable rate fluctuates in response to changes in market interest rates.

ā€¢ Therefore, the home loans are expected to get expensive, reducing the demand for them.

Then why did realty stocks rally today? šŸ“ˆ

ā€¢ The central bank increased the cap for Tier-I urban cooperative bank individual housing loans to Rs 60 lakh from Rs 30 lakh previously. The maximum for Tier-II urban cooperative banks has been enhanced from Rs 70 lakh to Rs 140 lakh.

ā€¢ Individual house loan limits for rural cooperative banks have been increased to Rs 50 lakh from Rs 20 lakh previously for banks with assessed net worth less than Rs 100 crore. The maximum for rural cooperative banks with a net value of more than Rs 100 crore has been raised to Rs 75 lakh from Rs 30 lakh previously.

ā€¢ Furthermore, the central bank has recently authorised state cooperative banks and district cooperative banks to lend up to 5% of their assets to commercial real estate ā€“ residential projects.

While a rise in mortgage loan rates may cause a short-term drop in demand, the steps announced on Wednesday will improve liquidity for the sector, and the overall outlook is "strongly" bullish as per Motilal Oswal.

What is your view?