Just ahead of the festival season, real estate developers hope that 0.50 per cent rate cut by Reserve Bank of India will translate into sales and thereby cut down on piled up real estate stock.
Navin Raheja, Chairman, Naredco, said: “The overall economic situation and challenges being faced by the industry, we welcome the reduction in repo rates, which will ease the burden on the buyers and developers. We are hopeful that with this interim announcement of rate cut the banks will take the cue and pass on the benefits to the end user which will trigger the demand and offtake of housing ahead of the festive season.”
Rohit Poddar, MD, Poddar Developers, said: “Both these rates have not come down in conjunction with the reduction in repo rates and there is still a large gap between the same. The large gap should not be used by banks to manage their NPAs - defaulting promoters should be brought to book - and instead the reduction should be passed on to where is it actually intended and required.
According to Rahul Saraf, MD, Forum Projects, “As developers we welcome this air of change and are hopeful of bridging the demand supply gap. This move will not only help developers initiate more projects at favourable capital but also create wider offerings benefiting home buyers.”
Navin Makhija, Managing Director, Wadhwa Group, “We are hopeful that this move will enhance the purchasing power of the buyer, especially the fence sitters. Since investments in real estate are significantly done through loans, this will certainly ease the buying process and is a win-win situation for the buyer and developer.”
Manoj Paliwal, CFO, Omkar Realtors & Developers, “Keeping in mind the mission of the government of housing-for-all by 2020, the move of the apex banks to reduce the risk weights on affordable housing applicable to lower value will also benefit the sector.”
Kamal Khetan, CMD, Sunteck Realty, said: “This rate cut will lead to a long and sustained improvement of the market sentiments through higher consumer spending and easy availability of loans to both consumer as well corporate. This is great news for the real estate sector as the rate cut would also lead to a significant reduction in home loan rates thereby reducing EMIs of home buyers. Corporate would benefit as interest outgo on existing loans would reduce and also enable them to raise equity.”
Anshuman Magazine, CMD, CBRE, said, “The RBI’s proposal to reduce the minimum risk weightage on individual housing loans for low cost homes will also help revive sales apart from lending support to the Government’s ‘Housing for All’ scheme.”
Mayur Shah, MD, Marathon Group, said: “Home buyers will benefit due to this rate cut. It is the starting point of reduction of interest rates will result in affordability in housing in the long term. With this announcement we are extremely positive for the real estate sector during the festive season.”
Anuj Puri, Chairman & Country Head, JLL India, said: “As opposed to the market’s expectation of a 25 basis points cut, the RBI has delivered an astounding 50 basis points reduction. With this, it has clearly abandoned its cautious baby-steps approach and assumed a bolder stance, obviously because the current economic fundamentals provide it with the room to do so.”
Sanjay Dutt, MD, Cushman & Wakefield, said, “On the developers’ part, the cost of borrowing could also decrease marginally, who have been reeling under high funding cost and increasing costs of construction.”
Sarang Wadhawan, Vice Chairman and MD, HDIL, said: “We expect banks to reduce interest rate by 25-50 bps making home loans more attractive which shall witness an uptake in the housing demand.”
Rishi Mehra, Co-Founder, Deal4loans.com, said one can expect home loan rates to come at nine per cent.
Getamber Anand, President, CREDAI, “This was long overdue. Not only in real estate, but across the manufacturing industries and businesses, everyone is feeling encouraged by this announcement. The move is actually in coordination with the Prime Minister’s vision of making India an aggressive manufacturing destination.”
Brotin Banerjee, MD & CEO, Tata Housing Development Company, “The cumulative cut of 125 basis points since January this year will give a very good push in improving both the consumer sentiment and the real estate.”