Developers feel the decision of the RBI MPC augurs well for the real estate industry in general and home buyers in particular, since the record-low interest rate regime would enable a large number of buyers to invest in property.
The RBI MPC decided to maintain status quo on key policy rates, in its third bi-monthly monetary policy review meeting on Friday, which was widely welcomed by the real estate fraternity, who said the move augurs well for both home buyers as well as the sector.
Commenting on the RBI policy, Vikas Wadhawan, Group CFO, Housing.com, Makaan.com and Proptiger.com, said, “The decision of the RBI MPC augurs well for the real estate industry in general and home buyers in particular, since the record low interest rate regime would enable a large number of buyers to invest in property. Since homebuyer sentiment has already improved in recent times, based on an increase in housing affordability in India, the RBI move will prompt buyers and investors to put their money in secured assets like real estate. The extraordinary liquidity support the RBI has provided to the economy in the aftermath of the coronavirus pandemic is highly commendable.”
Pradeep Aggarwal, Founder & Chairman, Signature Global, and Chairman, National Council on Affordable Housing, ASSOCHAM, said, “We appreciate the apex bank’s continued accommodative stance. Real estate has made a strong demand for low housing loan interest rates, and the RBI has helped the sector by maintaining the status quo. We recommend that customers take advantage of the current scenario because, in the future, prices may rise due to higher raw material costs.”
Atul Banshal, CFO, Experion Developers, said, “The RBI has maintained the repo rate at the same level, which will continue to support the low interest rate environment. It has also affirmed to its accommodative stance, which will provide stability to the markets and give much-needed liquidity. The spurt in CPI index is a cause of concern, but we have full trust in the Central bank to manage such risks while maintaining the rates and liquidity. The real estate industry hopes that banks will transmit the benefits of low interest rates and liquidity in their onward lending to the sector.”
Some developers observed that while the RBI decision was on the expected lines, additional reforms were needed to allow the sector to thrive. Also, a further reduction in interest rates would have helped homebuyers in times of the pandemic.
Manoj Gaur, CMD, Gaurs Group and Vice President – North, CREDAI National, said, “The unchanged repo rate decision by the RBI is on the expected lines; the apex bank maintained the accommodative stance that is the need of the hour. However, the real estate sector has been expecting sector-specific measures that could trigger healthy growth. Although the government has taken some steps to help the sector in recent months, additional reforms are required to allow the sector to thrive. The upcoming festival season will likely bring in more demand, and we are hopeful that the low home loan interest rates will make the buyers go for real estate assets.”
Uddhav Poddar, MD, Bhumika Group, said, “While a stable repo rate is appropriate, the need of the hour is industry-specific measures. We need to keep the buyers motivated, especially when the festival season is approaching. The requirement was to decrease the interest rates further to rekindle demand, making homes and real estate assets more appealing with low EMIs.”
Whatever be the case, some builders, however, are hopeful that with the emerging need, the demand for housing is going to sustain as it is a safe-haven asset.
Ram Raheja, Director, S Raheja Realty, observed, “The RBI with its continued accommodative stance to maintain liquidity surplus in the market can be viewed as being pragmatic. This status quo will further allow demand creation, including for high involvement products like real estate. The real estate sector is expected to continue benefiting from the pass-through of low benchmark lending rates to end consumers, especially in the residential segment. Homebuyers will continue to take advantage of the lowest ever home loan interest rates and with the emerging need, the demand for housing is going to sustain as it is a safe-haven asset. With improved GDP growth estimated in the near future, we expect that the real estate sector will contribute a substantial share to overall economic development.’’