The RBI decision to slash the repo rate by 25 bps on Thursday has brought cheer among among the real estate sector. Whille builders said that the quantum of the cut could have been more, they said that the decision will boost stakeholder sentiment.
Realty and banking stocks party as the RBI cut repo rate by 25bps..BSE Realty up 6%; Bankex gains over 3%
— Nalinakanthi (@NalinakanthiV)
January 15, 2015Mohit Goel, CEO, Omaxe Ltd , said: “A 25bps rate cut by RBI is on expected lines; and very much warranted at this stage looking at the strong macroeconomic indicators that have emerged in the last couple of weeks. The quantum of cut could have been more, nevertheless the apex bank needs to consistently reduce rates and banks must respond with alacrity in equal measure in order to propel investment and spur demand, especially in the housing sector.”
“This decision will also boost stakeholder sentiments for capital commitments. While lower interest rate alone may not be a reason for celebration for the real estate sector, however, a definitive indication about its future direction is a reason enough to put consumer sentiments at a higher pedestal and infuse a sense of optimism.”
Real estate sector has been struggling since the last three quarters with lower demand and increasing inventories, Pradeep Jain, Chairman, Parsvnath Developers, said.
He added: “We were hopeful that the apex bank would lower the key rates in its February 3 review. Today’s decision would help reduction in EMIs thereby encouraging fence sitters to conclude deals. Developers would also get funds at comparatively lower rates. We expect banks would also lower down their interest rates with immediate effect.”