Low Interest Rates Boost Up Residential Demand

Bangalore: Real estate developers are supporting RBI’s decision to slash Cash Reserve Ratio (CRR) that would help different sectors including real estate help improve in economy. According to developers, the interest rates should be brought down to a level which would enhance residential demand as well.

Pradeep Jain, CREDAI Chairman stated that RBI has given indication on the reduction of interest rates and he further cited that "for real estate sector in particular, this will serve as a signal that interest rates will now ease. Buyers may opt for floating rate loans at this juncture since the signal is clear. Also the rising input cost will not leave any space for reduction of price”.

Jain, CREDAI chairman as well as Chairman of Parsvnath Developers also said that "In the end RBI has acted with caution by keeping all rates unchanged and just by reducing CRR by 50 basis points. The tokenism has seen release of Rs 32,000 crore for the banking sector to lend. After the negative impact created by thirteen continuous rate hikes, this will prove insufficient to boost the growth”.

Lalit Kumar Jain, President of Confederation of Real Estate Developers' Association of India (CREDAI) cited that “the CRR cut will bring in liquidity. It will help the real estate market which is cash starved. However, it is important to see the interest rate shall have to come down to facilitate the home seekers to buy homes”.

Ajay Chandra, Unitech Managing Director stated that the upbeat decision of RBI in reducing cash reserve ratio (CRR) will increase the liquidity flow to various sectors and would also benefit the real estate sector.