Real estate developers are disappointed that the Reserve Bank of India chose to maintain status quo on policy rates announced on Wednesday. They point that a rate cut would have provided a cushion for the economy and also much needed zing during the current festival season.
“A rate cut now would not only have provided much needed cushion to the economy, but would have also added thrust to the government initiatives on affordable housing. The real estate industry is already under immense pressure owing to rise in input costs which have put severe strain on profitability. From a consumers perspective, the home loan rates are at their lowest and are unlikely to go down from here immediately,” Surendra Hiranandani, CMD & MD, House of Hiranandani said.
Govind Sankaranarayanan, CEO – Retail Business & Housing Finance, Tata Capital notes: “From an NBFC standpoint, the unchanged rate will have a minimal effect on the home loan, auto loan and white goods sector, the demand for which have remained steady and are expected to grow over the next two months as the festive season continues. We are expecting a 25-30 per cent increase in personal loan disbursement for the current quarter compared to last year.”
Shishir Baijal, CMD, Knight Frank India noted that, “The marked slowdown in the real estate sector, that started with the demonetisation last year and perpetuated in the wake of some structural reforms such as the RERA and the GST Act, is expected to prolong. However, a cut in the policy rate could have helped stimulate growth and demand.”
Sanjay Shenoy, Jt MD, Legacy Global Projects, “While the real estate sector is slowly picking up post the new policy implementation, a cut would have certainly provided an impetus to industry to attract investors and demand, especially during this festive season.
Anshuman Magazine, Chairman, India and Southeast Asia, CBRE said: “The stability in rates is expected to help build resilience in the current situation of sluggish GDP growth and rising inflation. While the residential sector expects enhanced activity levels in the ongoing festive season, homebuyers hoping for a further dip in borrowing costs could still get some relief as some banks may consider lowering their lending rates to leverage the festive season.