Real Estate Reacts on RBI REPO cut rate

The Reserve Bank of India (RBI) has cut the REPO rate by 25 basis points to 6% in the first b-monthly monetary policy meet of the new financial year. It was the first back to back rate cut by the Central Bank since the Monetary Policy Committee was formed in 2016. The real estate industry has positively accepted the Reserve Bank of India’s (RBI) decision to keep the repo rate unchanged at 6.5% on December 5. Real estate and allied industry professionals believe that this decision will not hurt home buyers’ sentiments further in the current situation. Developers share their reactions on RBI’s latest move. Manoj Gaur, MD, Gaurs Group “The benchmark lending rate cut by 25 bps to 6 percent is a positive move for real estate sector. The second consecutive reduction shows positive signs which can surely enhance the demand for housing, marginally.Though the last cut wasn’t passed on to the consumers so we would have to wait and watch whether this time the consumers get the benefits or not”  Prakash Pandey, Director, Fairwealth Group As Expected, RBI cuts rates by 25bps, and keeping the stance neutral. Looking at the rising crude oil prices, upcoming general elections and global ‘trade tension’ this 25 bps rate cut is a prudent to step towards pushing overall economic growth. “ Amit Modi, Director- ABA Corp, President (Elect) CREDAI (Western UP) “This is a good and much awaited development, since easing interest rate will help revive the investment cycle, especially in sectors like Real-Estate which are highly sensitive to interest rate movements.” Pradeep Aggarwal, Founder & Chairman – Signature Global India Pvt. Ltd and Chairman – ASSOCHAM National Council on Real Estate, Housing and Urban Development The RBI policy cut rates will not only be a positive outcome for the Real Estate sector, but also for the eligible new home borrowers who can take advantage of the subsidies scheme under PMAY (Pradhan MantriAwasYojana). This move will be a big boost for affordable housing and help for first time home buyers also the rate cut brings fetches confidence for the market as this will make availability of more money at the banks thereby lowering the EMI burdens. And to add icing to the cake, the government has also extended the time-limit of the PMAY scheme to March 31, 2020 for middle-income group buyers. Dhiraj Jain, Director, Mahagun Group This is really good news especially for home loan borrowers with the RBI bringing down the key policy rate by 25 bps in its monetary policy review, signalling lower interest rates. The year has been good so far with lot of policy measures being taken by the authorities that will help the sector improve its standing. Kaushal Jain, MD, Arihant Group “The repo rate cut by RBI will aspire the real estate sector to pick up their businesses in the market. It will be a constructive progression for the sector and is counted on with the RBI policy rate cut by 25 bps. This step is highly expected to rejuvenate the real estate market as it will give assistance in taking down the marginal cost of fund based lending rates (MCLR) thereby bringing in more availability of money at the banks.” KushagrAnsal, Director Ansal Housing & President CFREDAI Haryana A constructive progression for the real estate sector is counted on with the RBI policy rate cut by 25 basis points. This is surely going to boost the market as this is the second time in FY 2018-19 that the rates have been cut by 25 bps changing the reserve repo rate at 5.75%. The marginal cost of fund based lending rates is expected to be low which in turn infers the availability of more money the banks thereby benefiting both the end-users and the developers. 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. Amit Ruparel, Managing Director, Ruparel Realty, “With GudiPadwa and AkshayTritiya just a few days away, we anticipate that the announcement is surely going to result in increased residential sales, given the banks pass on the ease to the customers.  Also, with the government enhancing the exemption limit for the general category of individual taxpayers has given way for increment in homebuyers buying capacity thereby speeding up residential sales.” TushadDubash, Director, Duville Estates, “The earlier rate cut broke the deadlock, this one should provide further momentum given the timing of GudiPadwa being around the corner. We hope that this will spur home buyers in taking a decision.” Ramesh Ranganathan, CEO, Bombay Realty RBI’s revision in Repo rate to 6% is a good thing to have happened – a positive development for the real estate sector. This move will ease liquidity and leave more money in the hands of home buyers. It could not have been better timing – Bombay Realty recently received occupation certificate for the Island City Centre project in Dadar East,” said Ramesh Ranganathan, CEO, Bombay Realty. José Braganza, Joint MD, B&F Ventures (P) Ltd. The decision of reducing the Repo Rate rate to 6% will be a relief for the real estate industry as there will be more liquidity due to the lower marginal cost of fund based lending rates. Further, the lower EMI’s on loans which are likely to come down, will make the property affordable and will attract potential buyers. This is a positive change and it will give a boost to the lately languishing real estate sector.