Real estate players express disappointment over RBI's decision to keep rates
New Delhi, December 5 () Cash-hungry real estate agents expressed disappointment at Thursday's RBI decision to keep the reference interest rate unchanged and said the main bank should have reduced the repos rate by 1 percentage point to boost home sales and economic growth.
India Inc. expected a 100 basis point rate cut instead of small adjustments, such as a 25 basis point rate cut, which would have fueled recent government initiatives to boost GDP growth, said NAREDCO president, Niranjan Hiranandani. said.
The decision to wait and observe the performance of the previous cuts will go against current feelings. Markets in general are disappointed, he said, adding that real estate developers face a liquidity crisis.
Knight FRank India's CMD, Shishir Baijal, said the RBI's decision not to lower the interest rate has been a surprise and a disappointment to the industry.
A lower interest rate would have helped boost credit demand and investment in the economy, aiding general economic growth. It would have provided much-needed postponement to some ill sectors such as real estate and the automobile, he added.
Anarock President Anuj Puri said: From a real estate point of view, rate cuts are obviously always welcome, as they help improve the overall feeling. The expected rate cut of 25 basis points would have caused mortgage loan values to fall below 8% for the first time ever.
Sanjay Dutt, MD and CEO, Tata Realty&Infrastructure Ltd, said: This time, while the RBI's focus is still reviving the economy, we are disappointed not to see changes in the policy rate.
The real estate industry, in particular, has faced some difficult times and with inventories accumulating the need to boost demand and encourage purchase is now more than ever, he added.
However, Anshuman magazine, president and CEO of India, Southeast Asia, the Middle East and Africa, CBRE, said the RBI’s decision to keep the exchange rate unchanged is an indication of the government’s focus on dynamics of inflation and growth.
Ramesh Nair, CEO and CEO of JLL India, said the central bank in keeping rates unchanged has recognized that the need for time is to instill confidence in economic growth through a holistic approach.
The decision to maintain policy rates is a good omen for the economy, as the recently introduced policy reforms will take time to develop and materialize. The economy needs to absorb the impact of the recently introduced reforms and the previous rate cuts. The real estate sector is expected to increase due to favorable policy incentives and faster transmission of previous rate cuts, he added.
Concerned about the rise in food prices, Elara Technologies CEO Dhruv Agarwala said: Under the circumstances, the main bank had few options other than maintaining the status quo with respect to the buyback rate.
News Corp and Elara Technologies, backed by Softbank, own the real estate portals Housing.com, PropTiger.com and Makaan.com.
Sankey Prasad, CEO and president of Colliers International India, said the government along with industry experts should identify and solve other sensitive problems that affect the sector.
The MD of the Gaurs group, Manoj Gaur, emphasized the effective transmission of a cut of 135 basis points in the repo rate this year.
Amit Modi, Director, ABA Corp and President (Elected), CREDAI Western Uttar Pradesh said: By maintaining the status quo, the RBI has given some kind of surprise after a long time. Unfortunately, it is contrary to our expectations.
The industry expected a rate cut, as that would have provided a positive feeling for the housing sector. Any positive news about loan interest rates would have provided the sector with an upward trigger, said Samir Jasuja, Founder and MD, PropEquity. Sakshee Katiyal, CEO, Home and Soul, said the industry is disappointed with the RBI's decision as the real estate sector is facing a huge slowdown in demand. MJH MR