‘The sta­tus quo on the key pol­icy rates was a re­lief for the real es­tate in­dus­try though it hoped for a re­duc­tion that could bring cheer to the home­buy­ers in the com­ing New Year.

Realty Plus - - Contents - Text: Sapna Sri­vas­tava

In ret­ro­spect, the RBI main­tain­ing repo rate at 6.5% will not have any se­ri­ous im­pact, though fall­ing crude prices and mod­er­ate eco­nomic growth in­di­cated a rate cut, Real es­tate be­ing a crit­i­cal driver of In­dia’s eco­nomic growth could have used a booster shot to heighten the mar­ket mo­men­tum.

The real es­tate sec­tor wor­ried over a pos­si­ble rate hike wel­comed with a sigh of re­lief the Mone­tary Pol­icy Com­mit­tee’s de­ci­sion of keep­ing the pol­icy repo rate un­der the liq­uid­ity ad­just­ment fa­cil­ity (LAF) un­changed at 6.5 per cent. Surely, with the New Year com­ing in, this move will at­tract more home buy­ers as the in­ter­est rates on home loan will remain un­changed. As Manju Yag­nik, Vice Chair­per­son, Na­har Group rightly men­tioned that there has been no change in the repo rate twice in a row now which seems like a well-thought-out move by the RBI and this will re­sult in a win-win sit­u­a­tion for both de­vel­op­ers and buy­ers.

Dr. Ni­ran­jan Hi­ran­dani- Na­tional Pres­i­dent –NAREDCO fur­ther briefed that with the in­tent to en­cour­age banks to lend more, RBI has also an­nounced that it will re­duce the SLR by 25 ba­sis points ev­ery cal­en­dar quar­ter un­til it reaches 18 per­cent, which is an­other pos­i­tive.

Cer­tainly, most of the ex­perts agree that the de­ci­sion to keep the Repo Rate un­changed by 5 out of 6 mem­bers of the mone­tary pol­icy com­mit­tee of the RBI is in line with the mar­ket ex­pec­ta­tion con­sid­er­ing sta­ble in­fla­tion out­look. But many feel dis­ap­pointed by the de­vel­op­ment for the fol­low­ing rea­sons: • Home buy­ers are reel­ing un­der the GST and Stamp Duty hike • Bank­ing and fi­nan­cial ser­vices in­dus­try is fac­ing liq­uid­ity crunch • Many Banks and hous­ing fi­nance com­pa­nies have al­ready in­creased their MCLR and lend­ing rates

Jaxay Shah, Pres­i­dent, CREDAI Na­tional rightly con­tends that what the real es­tate in­dus­try was look­ing for­ward to is avail­abil­ity of credit fol­low­ing the NBFC cri­sis. He stated, “The pol­icy is com­fort­ing in the sense that RBI has ac­knowl­edged the is­sue and is ready to sup­port NBFCS and Hous­ing Fi­nance Com­pa­nies. Real es­tate in­dus­try ea­gerly awaits these in­ten­tions trans­lat­ing into pos­i­tive ac­tion from the RBI in the near term.”

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