Real Estate Industry Hails RBI Repo Rate Cut by 25 bps

Real Estate Industry Hails RBI Repo Rate Cut by 25 bps

By siliconindia   |   Thursday, March 5, 2015

The Real estate Industry, which has been seeing an unsold inventory stack, negative buyer’s sentiment and continuous raw price rise has cheered up and hailed Reserve Bank of India’s second time repo rate cut by 25 basis points and saying that this decision could benefit if the financial institutions surpass on the same.

On Wednesday, Reserve Bank of India governor, Raghuram Rajan has brought down the benchmark repo rate by 0.25 percent (25 basis points), to 7.5 percent from 7.75 percent. Thus, the reverse repo rate slashed to 6.5 percent and CRR (Cash Reserve Ratio) kept unchanged at 4 percent.  In the past two months, this was the second RBI rate cut.

Real estate analysts are expecting that this would spur demand for home and help the sector to rush the liquidity crisis as it will make home loans cheaper.

Lalit Kumar Jain, Confederation of Real estate Developers Association of India (Credai) chairman said “the drop in the repo rate by 0.25 percent is an RBI’s excellent move as it helps the real estate industry to tackle the unsold inventory pile up and further there is a scope to ease the credit policy”.

Sanjay Dutt, Cushman & Wake field Exceutive managing Director, South Asia said that the recently presented Union Budget did not have any announcement aimed to boost real estate sector and there were higher expectations from the RBI by stakeholders. Real estate developers hoping for the best that the RBI repo rate cut will build the confidence of home buyers and spur the home buyer’s decision.

Parsvnath Developers chairman, Pradeep Jain said “the surprise move of RBI rate cut would push real estate sales and ease out liquidity in the market. It will also spur other lenders to cut lending rates considerably”.

“We predict that other lenders will pass on this reduction and consequently this will urge investors’ sentiment and confidence”, SARE Homes, MD, David Walker added.

India Bulls Housing Finance, Vice Chairman and MD, Gagan Banga stated “The consequent plan between RBI and the government may result in the forthcoming growth cycle to be longer than the normal and this surprise move will definitely drive the real estate sector.

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