Real Estate players welcomes RBI’s rate cut decision
Real estate developers and experts have welcomed the move of Resreve bank of India (RBI) to cut the repo rate by 25 basis points. It will help in boosting housing demand, especially in the affordable housing segment.
A good monsoon in progress, low inflation numbers, favourable global environment and an overall uptick in industry sentiments seem to be the catalyst for this rate cut, according to them.
RBI reduced the short-term lending rate, or repo rate, by 25 basis points to 6% at its third bimonthly policy review.
Here are reactions of some Real estate developers.
Mr. Sachin Sandhir, Global Managing Director – Emerging Business, RICS South Asia
“The central bank has cut repo rates by 25 basis points to 6 per cent, which is good news for the real estate industry. This is the first rate cut by the RBI in about ten months. The slash in repo rate is on expected lines considering that inflation is under control. The cut will lower interest rates and make home loans and auto loans among others cheaper. Reforms in the real estate sector (RERA/GST) coupled with the rate cut will encourage home sales and we are glad that this cut has come just ahead of the festival season, which usually sees brisk home sales. It will help break the lull in the sector. We are also glad that the RBI governor has taken note of the need for a time-bound single window clearance at the state government level for faster approvals for affordable housing projects. This has been a demand of the industry and RICS for a long time. A delay in securing approvals adds to the cost of a project, so any move towards faster approvals will benefit the affordable housing sector.”
Mr. Vinod Rohira, MD & CEO, Commercial Real Estate & REIT, K Raheja Corp
The RBI policy review of the financial year 2017-18 has witnessed a change in the repo and the reverse repo rate which will give a much-needed impetus to the realty sector. With the recent change in reforms and policies, this rate cut comes as a blessing improving buyer sentiments. The steps taken are on the right path to address the economy, and we are optimistic that the banks will also pass on the benefit to the consumers, which in turn will help propel the growth of the industry.
Mr. Sanjay Jain , Group Managing Director, Siddha Group
The 25 basis point slash in the repo rate and the reverse repo rate in the third bi-monthly policy 2017-18 will have a positive impact on the real estate market. This move is expected to make home loans cheaper if the banks pass on the benefits to the consumer improving the buyer’s sentiment to invest in the market. The Government and RBI are working closely to provide a major thrust to housing for all. Faster GDP growth and declining interest rates will collectively help boost the growth of the real estate industry.
Pradeep Aggarwal, Co – Founder & Chairman, Signature Global
“Implementation of GST has completed its very first month and a great response can be already observed as the buyers’ queries are increasing day by day. This rate cut has come at a time when GST and RERA have entered in to a settled phase and the sector is observing a transition where the buyers are increasing their activity and developers eagerly waiting to satisfy the demand.”
Mr. Ravindra Pai, MD, Century Real Estate Holdings Pvt Ltd
“It is a welcome move, especially to combat the odds industry was seeing in recent times. Cheaper home loan definitely will boost positive sentiments amongst the home buyers and in turn will help the developers to gain the momentum.
With RERA ushering in, budget housing getting infrastructure status and RBI rate cuts, we certainly feel good times for the industry are just a stretch away and a matter of a very short time.”
Mr. Ashwin Sheth, CMD, Sheth Corp Ltd.
“Although the RBI has maintained its neutral stance, the indication towards easing of policy rates and the upcoming festive season will renew further interest in the real estate sector. The reduction in the repo rates will help in bringing down the home loan interest rates which in turn is likely to bring in some amount of relief to the homebuyers. But, the banks will also have to pass down the benefit to the homebuyers to encourage the prospective buyers to move a step closer to purchase their dream home. Interest rate is one of the important factors as the equated monthly installments (EMI) is directly linked to it. Therefore, if the banks pass on the benefits and the EMIs fall, we feel the demand for the housing should witness momentum as far as buying new properties are concerned.”
Mr. Brotin Banerjee, Managing Director and Chief Executive Officer, Tata Housing Development Company Limited
“We anticipate that the rate cut announced today by .25 BPS, coupled with commensurate benefits for borrowers, will impact home loan rate positively and enhance the consumer sentiment. With the market view calling for measures that encourage investment to boost growth numbers, and with the installation of a regulatory regime for the real estate sector, we expect this move to keep the stimulus on for potential home buyers to invest, and to benefit current borrowers.”
Pankaj Bansal, Director, M3M Group
“RBI’s decision to lower the REPO rate is on expected lines. Inflation is at its lowest in five years and economic growth is picking up. This revision will positively impact the sentiments surrounding the real estate sector. Banks will now be able to offer loans at more attractive rates. Cheaper loans for home buyers will promote a renewed interest in residential property purchase from end users and investors. The cost of funding for real estate developers should also now reduce. Overall, this move definitely indicates a positive direction for the economy in general and therefore also for the real estate sector, as its performance is directly linked to the basic economic fundamentals.”
Mr. Ravish Kapoor, Director, Elan Group
“We appreciate the decision for reduction in the repo rate as this would boost the liquidity in the system. Easing interest rate will help revive Real-Estate sector which is profoundly sensitive to interest rate movement.”
Mr. Sumit Berry, Managing Director, BDI Group
“RBI’s decision to reduce the repo rate will surely improve the economy. The lowering of the Repo rate will spur growth of the real estate sector with sentiments of buyers turning favorable. This will ensure uplifted property demand in near future and also boost the affordable housing segment.”
Mr. Rahul Singla, Director, Mapsko
“With RBI’s decision of offering reduction in the repo rate, we can expect further rate cut for home loans. Reasonable loans for home buyers will give a boost to the real estate sector favorably. Industry trends are already pitching for upward growth trajectory, companies are focusing on deliveries & liquidity of their projects, making it the right time to invest in the sector.”