RBI status quo brings cheer to the real-estate industry
Real-estate developers heaved a sigh of relief after the Reserve Bank of India (RBI) kept the key policy rates unchanged and said that any hike in the interest rate would have affected housing demand during the upcoming festival season.
“RBI’S decision to keep the repo rate unchanged is a relief to the developers, home buyers and real-estate stakeholders at large. However, the economy is too precariously poised for real estate to pull itself by its bootstraps. We hope in particular for decisive steps to end the credit freeze,” Confederation of Real Estate Developers’ Associations of India’s (CREDAI) national president Jaxay Shah said.
National Real Estate Development Council’s (NAREDCO) president Niranjan Hiranandani said RBI has kept rates unchanged but some banks have already hiked interest rates. He wondered whether banks will now reverse their recent hikes.
Anshuman Magazine, chairman, India and South East Asia, CBRE, said, “Any hike in repo rate would have impacted consumption sentiment and also the real-estate sector. Moreover, the change in stance of the RBI from neutral to calibrated tightening is an indication of the intent of the RBI to keep the inflation levels in check.”
WELCOMING THE MOVE
Anuj Puri, chairman, Anarock, said it was an “unexpected stance” and could be favourable for the real-estate sector in the short term. However, he said that it is a worrisome development from a macro-economic long term prospective.
JLL India-country head Ramesh Nair said it is a welcome step for the real-estate industry as it would give the much-needed impetus to the housing market which has been showing signs of revival in the last six months.
“For home buyers, the timing could not have been better as lending rates are not expected to increase from current levels. Besides providing a major fillip to buyer sentiment, RBI’S move should also translate into boosting demand,” Nair said. Knight Frank India CMD Shishir Baijal said, “While we are in a rising interest rate cycle now, the pause will provide a temporary relief to the home buyer sentiment and support the festive season demand.” Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and Proptiger said this is great news for home buyers who are considering taking advantage of the lucrative offers provided by developers during festive season.
“The increase might have impacted consumption sentiment negatively during the festive season. From the consumer perspective, home loan rates are attractive so they must utilise this opportunity and make their purchases by cashing in on deals available in the market,” said Surendra Hiranandani, CMD, House of Hiranandani. ATS group firm Homekraft CEO Prasoon Chauhan welcomed RBI’S decision as status quo on rate hike would give the right boost to the sector. “We expect with the festive season kicking in, there will be further growth in housing demand for projects by renowned developers,” he says.
Manoj Gaur, MD, Gaurs Group, said there is a room for financial institutions to cut down their lending rates for their customers. Deepak Kapoor, director, Gulshan Homz said that the apex bank was compelled to maintain status quo given the overall economic situation.
RATES UNCHANGED
Pradeep Aggarwal, chairman of Signature Global, stated that slashing rates might have improved the real-estate market scenario and triggered the demand and sales process.
Raj Singhal, CEO, Elan Group, said the decision will have positive impact on the realestate sector and despite the inflationary pressure and rupee depreciation, the RBI has chosen to keep the rate unchanged, thereby not increasing the cost of funds for developers and investors.
Ashok Gupta, MD, Ajnara added that the rate cut was the need of the hour to provide the much-needed push for the real-estate industry and facilitate growth.
Dhiraj Jain, director of Mahagun Group, was of the opinion that the status quo would uplift the sentiment of the buyers, while Saya group CMD Vikas Bhasin and SG Estates Director Gaurav Gupta said a rate cut could have driven property demand.
“With the real-estate sector on the revival mode, a decrease in the repo rates during the festival season could have improved the market sentiment in a big way,” said Kamal Taneja, managing director of TDI Infracop.