Realtors celebrate RBI’s decision on policy rates. The status quo is being seen in view of the persistently high inflation and a lower-than-expected contraction of the economy.
Realtors celebrate RBI’s decision on policy rates. The status quo is being seen in view of the persistently high inflation and a lower-than-expected contraction of the economy.
The real estate sector welcomed the Monetary Policy Committee (MPC) of the Reserve Bank of India’s (RBI) decision to keep its policy rates unchanged for the third time in a row. The sector believes this would mean the home loan interest rates would continue to stay at an all-time-low and would help the economy.
In its bi-monthly meeting, the committee headed by RBI Governor Shaktikanta Das decided to keep the repo rate unchanged at 4 per cent and the reverse repo rate at 3.35 per cent. The RBI had last changed its policy rates back in May.
Anurag Mathur, CEO, Savills India, said that the lending benchmark lending rates remaining unchanged would complement the other recent measures announced by the government, “especially in the last stimulus package”.
“Maintaining an accommodative stance is significant as it emphasizes the central bank’s focus on spurring demand which remains the highest economic concern at the moment,” he said.
Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and proptiger.com, said the status quo on policy rates was expected in the face of “persistently high retail inflation” and an already record low repo rate of 4 per cent.
“Even as signs of recovery appear in Asia’s third-largest economy, the RBI has said that it would be open to cutting rates if the economy needs support, which is a very positive signal for the future. Interest rates on home loans are already at sub-7 per cent level, with banks offering further sweeteners such as processing fee waivers among many others. We hope banks will continue to lend vigorously to the real estate sector, the second-largest employment generating sector in India,” he added.
Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani, said even though the MPC kept rates unchanged, there is room for financial institutions to cut down on their lending rates. “Now the entire focus would be on how the government plans to combat the economic slowdown and boost demand. A series of measures in the form of capital injection, refinancing of banking institutions, policy impetus, subsidies, and offers are required to see a faster recovery,” he said.
Hiranandani added that the country's economy recovered faster than expected in the July-September quarter and the growth in the economy has also been reflected in the real estate activities of the last quarter “where both residential as well as commercial markets have seen a sharp increase in activities”.
“Reduction in stamp duty charges in some states and varied offers during the festive season coupled with a rate cut would have surely boosted the buyer sentiment. The real estate industry in particular, stands to benefit due to several measures taken by the government so far.” He further elaborated that there is a lot that needs to be done for the sector to improve the pace of growth. “We are looking forward to a bigger rate cut and sector-specific lending provisions to improve both the liquidity scenario and consumer spending ability.”