The rate cuts by the Central bank will act as a balm to the subdued economic activity components that have a lot of political and macro economic uncertainties to handle in the near to medium term. NBFCs and Fintech lenders who have faced starc rise in cost of funds in the last 9 months will also get some breather with this action and is a welcoming move.
Khushru Jijina, MD, Piramal Capital and Housing Finance It is necessary to resurrect India’s consumer demand and economic growth before a synchronous downturn in advanced economies heighten market volatility. Today’s rate cut and moderation in liquidity coverage ratio coupled with recent instances of liquidity injections indicate that RBI is cognizant of these risks. These measures would certainly help ease liquidity and improve access to cheaper credit by India Inc as well as retail consumers. The focus to align the Indian housing finance securitisation market as well as the secondary market for corporate loans with international best practices as announced today will essentially deepen these markets and ensure better price discovery. We look forward to the detailed notes on RBI’s decision to allow Non Deposit taking NBFCs to apply for Authorised Dealer licenses which is expected to expand the forex market. Niranjan Hiranandani - National President - NAREDCO and Sr VP-Assocham The need for flexibility with the evolving situation in India, given that both, inflation and growth have slowed, was reflected in the RBI’s move. Economic growth weakened to 6.6 per cent at end-2018, the slowest in five quarters; while annual retail inflation was low, at 2.57 per cent in February following five months of deflation in food prices. The RBI move is expected to lift industry sentiments, as also provide relief to various stakeholders like corporates as also in real estate, homebuyers. We expect that banks further pass down the benefit for the rate cut to the home buyers which shall further trigger the home buying in to the actual sales. Shishir Baijal, Chairman & Managing Director, Knight Frank India We are delighted with the second consecutive rate cut announced today which ushers an era of falling interest rate regime. We hope that the reduction in rate are passed on by the banks to the home buyers. Lower interest rates, along with the recent reduction in GST rates for under construction properties, should provide the fillip to end user demand. The real estate sector has been looking forward to such stimuli to boost sales velocity.Mr. Amit B. Wadhwani, Co-founder, Sai Estate Consultants
The second consecutive repo rate cut from the RBI is in lines with the expectations, although markets were expecting a more accommodative stance with 50 bps rate cut.There have been many meaningful interventions by the government and regulator which has provided positive boost to the buying sentiment amongst the home buyers. The real estate residential sector better sentiment growth concurs with improved sentiment in overall business sentiment in the country. Besides OMO, the added focus on currency swap will provide the required easing in the transmitting benefits of the rate cut and also emanating into improving liquidity in the sector. With short term food inflation expected to be benign, the possible seasonal related inflation reversal after monsoon will be a guidance of MPC to go for next rate cut in the month of August.
Mr. Rakesh Reddy, Director, Aparna Constructions & Estates Pvt. Ltd
Revision of repo rate by 25bps by RBI for the second time this year is a much needed and encouraging move for the real estate sector. Such consistent initiatives not only help ease liquidity crunch, it also aids in improving access to affordable credits thereby reviving consumer demand and overall health of the sector. Recent reduction in GST for under construction properties clubbed with easing the interest rate will surely provide the much needed stimulus to the end user demand. We are hopeful that these benefits will be passed on to the homebuyers by the banks as affordable home loans have a direct influence on buying sentiments in an ancillary way.
Rohit Poddar, Joint Secretary , NAREDCO West and Managing Director, Poddar Housing and Development Ltd.
The actual inflation has stayed below than projected since February so there was a space for a further cut down in the rates. This is an election year and we can expect transient policies by the authorities due to the ambiguity over the possible policy changes by the newly elected government. This rate cut will affect the buying sentiments in a roundabout way as it is likely to make home loans cheaper. It will be a buoyant Gudipadwa for the sector.
Madhusudhan G, Chairman and MD, Sumadhura Group
“After lowering the GST rates, this second consecutive repo rate cut by RBI will further propel the Indian real estate industry into a recovery drive in the coming year. There is already a significant boost witnessed in the housing sales after the first repo rate reduction, and this move is another shot in the arm. However, the industry would be hopeful that RBI establish a mechanism for effective transfer of these rates leading to lower lending rates, which would accelerate consumer spending, further bolstering economic growth."
Shailesh Puranik, Chairman and Managing Director