The RBI decision to cut repo rate by 25 basis points today will lead to cheaper home loans and boost housing sales during the upcoming festival season, according to property developers and consultants.
They expect banks to pass on this rate cut by lowering the interest on home loans.
DlF CEO Rajeev Talwar, who is also Chairman of NAREDCO, said the decision to cut the benchmark repo rate by 25 basis points could not have come at a more appropriate time.
“The Indian economy is at a point of inflection. Easing procedural bottlenecks, speedier project clearances and reviving credit flows to the productive sectors such as real estate are critical for the economy to decisively move to a higher growth trajectory. Another small rate cut in the coming months should not be ruled out,” he added.
CREDAI’s President Jaxay Shah said this is a welcome move just before the festival season and will help boost sales.
“Banks should pass on the benefits to customers and the government should enforce and instruct banks to do so,” he added.
The real estate sector is facing a multi-year slowdown, particularly residential segment. The sales have been hit further post demonetisation and
NAREDCO President Parveen Jain said the cut was much awaited and will fuel demand.
Tata Housing MD & CEO Brotin Banerjee said: “We anticipate that the rate cut announced today coupled with commensurate benefits for borrowers will impact home loan rate positively and enhance the consumer sentiment.”
The RBI decision to cut repo rate by 25 basis points to 6 per cent - a 7 year low – is in line with industry expectations amidst low
inflationary trends, CBRE Chairman (India and South East Asia) Anshuman Magazine said. “We believe that this cut will result in making housing loans cheaper and help credit offtake in the housing sector.”
He said the decision, along with the new real estate law and GST, would provide further impetus to the segment and help in rejuvenating housing sales.
Knight Frank India CMD Shishir Baijal said that “while it is a welcome move we were looking forward to a much more aggressive rate cut.” However, he said the central bank has adopted a monetary policy that propels economic growth, which in turn would boost the Indian real estate.