Realty developers welcome rate cut

Real estate developers say the rate cut is encouraging and will give a fillip to the sluggish sector. Industry expects lower lending rate which will in turn will spur growth.

Shishir Baijal, CMD, Knight Frank , said,“A 25 bps cut in policy rate is extremely encouraging and will definitely provide a huge fillip to the real estate industry that is currently facing a tough time. We hope that the banks will pass on the benefit to the consumers. This news augurs well for the sector that has also witnessed the passage of the Real Estate Regulation Bill and REIT. With inflation under control and an expected normal monsoon this year, we look forward to a continued accommodative stance by the RBI.”

Amit Modi, Director ABA Corp, and Vice-President, Credai, Western UP , said: “This is a good development and a welcome move, since easing interest rate will help revive health of businesses like real estate which is highly sensitive to interest rate movement. We also sincerely hope that both Finance Ministry as well as the RBI ask all the banks to transfer the benefits immediately to help the end consumer, rather than help in buffering the bottom lines of the bank."

Ashish Raheja, MD, Raheja Universal, said, “We believe this will surely have a positive impact on the economy as well as across sectors at large. More specifically from the real estate sector perspective, we believe that there will be some renewed interest from prospective home buyers who were hit recently by the ready reckoner rate hike across Maharashtra. While this move is positive, it is left to be seen whether banks will pass on these benefits to their customers.”

Deepak Joshi, President and Chief Business Officer, Religare Housing Development Finance Corporation Ltd , said, “As expected, it's a welcome move of RBI by cutting repo rate by 25 bps. This coupled with marginal cost of funds based lending rate - (MCLR) on which SBI has already taken a lead, will further reduce the lending rates in the market and increase credit offtake. Also, EMIs on retail consumer loans will further soften which will increase demand for auto and home loans.”

Anshuman Magazine, CMD, CBRE South Asia, said, “On the back of moderating inflation levels, controlled fiscal deficit and cautious economic sentiments, the RBI’s decision to pare key interest rates in its latest monetary policy review was largely expected by the industry. The rate cut is likely to help lower borrowing costs and support growth further in 2016. For the real estate sector this is particularly critical. It is expected that this benefit will be completely transferred to the borrowers, which will result in lower lending rates thus helping to revive housing sales.”