TRANSMISSION OF RATE CUT KEY TO BOOST HOUSING DEMAND

NEW DELHI: The Reserve Bank of India’s (RBI’s) decision to cut key policy rate by 25 basis points will boost consumer sentiment as well as housing sales during the festive season which is a crucial period for realty sector, property consultants said on Friday.

However, they said the RBI should ensure effective transmission of rate cuts, announced on Friday as well as earlier, to home loan borrowers. “Consumers are spending less on everything from FMCG to automobiles—and, of course, real estate. Naturally, the sector eyes the RBI’s monetary policy for cuts in the key lending rates to support various measures taken by the Centre to boost consumption sentiment,” Anarock chairman Anuj Puri said.

The move would go some way in improving consumer sentiment in the festive season, which is a crucial period for real estate sales, he added.

“However, much depends on how efficiently banks transmit the benefits to their home buying borrowers,” Puri said.

CBRE India chairman and chief executive officer (CEO) Anshuman Magazine said, “The timing of the cut is crucial as it is expected to spur real estate demand and consumption in the festive season as it is an important period for investment/consumption across sectors.” It is now critical that banks facilitate a faster transmission of these rate cuts to ensure that the measures reap results, he added.

JLL India CEO and country head Ramesh Nair said the real estate sector is likely to witness accelerated sales owing to favourable policy reforms and the gradual transmission of rate cuts to end-consumers through lowering of mortgage rates.