Jaxay Shah, CREDAI National President: Reduction of repo rate by 0.25 per cent and change in policy stance to ‘neutral’ by RBI shall boost investment sentiments in the economy and add momentum to growth impulses. The consequential reduction in EMI burden for the consumers should pep up the housing demand. With inflation down to historic levels, India is now all set to leap forward into a higher growth trajectory.
Pradeep Aggarwal, Chairman, National Council on Affordable Housing, ASSOCHAM: The RBI policy cut rates will not only be a positive outcome for the real estate sector, but also for the eligible new home borrowers who can take advantage of the subsidies scheme under PMAY (Pradhan Mantri Awas Yojana). This move will be a big boost for affordable housing. This will make available more money at the banks, thereby lowering EMI burdens. Further, the government has extended the time limit of the PMAY scheme to March 31, 2020 for middle-income group buyers.
Shishir Baijal, CMD, Knight Frank: The reduction in Repo and Reverse Repo rates by the RBI by 25 bps is a welcome move, which we hope will provide a further fillip to the demand side for real estate. As a result of this reduction, we hope that banks will pass on the benefits of the revised rates to the consumer for loans. For a sector which has been suffering from poor end user demand for some time now, this is a step in the right direction.
Ramesh Nair, Country Head, JLL India: RBI’s decision is in the background of declining inflation below 4% and stable macro-economic indicators. This coupled with sanity in crude oil prices and a less volatile rupee has provided the much needed elbow room for RBI to provide stimulus to the economy by reducing repo rates. The Monetary Policy Committee’s stance is quite positive from the perspective of providing the necessary growth stimulus and reviving investments.
2019 has started on a positive note for Indian real estate with a welcome budget that has given a slew of incentives for home buyers and developers with adequate focus on affordable housing. The timing of the reduction in policy rate could not have been better. Not only will this improve the overall sentiment, but will also boost the housing market that is already showing signs of recovery. With residential sales and new launches on an upward trend in 2018, genuine home buyers are now actively considering a serious buying decision.
Manoj Gaur, Vice-President, CREDAI National: With RBI reducing the repo rate after keeping it unchanged since the last two monetary policy reviews, it shows a softer stand towards lending. Banks will surely reduce the lending rates, though marginally, which can boost the sentiments in the market. Also with the push which the government showed towards affordable segment in the 2019 budget where the income tax rebate was extended to ₹5 lakh, end users would now be more motivated to purchase homes post the repo rate cut.
Prashant Solomon, Convenor, CREDAI National: Home loan interest rates had increased by 5-7 per cent over the last one year. The new rate cut, announced for the first time since 2017 by RBI, will pave the way for cheaper home loans as well as increase liquidity in the banking system. Together with the benefits announced for the real estate sector in the Interim Budget 2019, one can expect this new rate cut to bring about a growth in demand for the residential property sector.
Shivam Sinha, CEO, Indiassetz: The last one year has been challenging for the sector with RBI having increased the repo rate by 50 base points that led to skyrocketing home loan rates and increase in the associated costs. It not only led to some of the big builders falling in the category of defaulters, but also made the middle class buyer more apprehensive of putting his money into real estate. This left a significant percentage of under-construction and constructed homes unsold. While this cannot be attributed as the only reason for the huge supply-demand gap and the other fallouts, it sure is a key influencer for the price-sensitive realty market. Both the changes proposed in the interim Budget for real estate and the RBI’s repo give some relief.
Boman Irani, CMD, Rustomjee Group: The drop in repo rate was the actual requirement for the real estate sector in the current scenario given the recent budget announcement that paved the way for opening the investment market for second homes. The announcement is parallel to the government’s ‘Housing for All’ vision as it will give the real estate sector the necessary fillip which was the requisite, particularly since the year has just begun. With home loan interest rate going down, we expect a good housing demand coming in with a robust market.
Amit Ruparel, MD, Ruparel Realty: The announcement is in sync with the recent budget announcement giving housing sector the necessary push. The government enhancing the exemption limit for the general category of individual taxpayers has given way for increment in home-buyers’ buying capacity, thereby speeding up residential sales. We are positive that this year is going to be good for the real estate sector, specially the residential sector, because of favourable government policies along with the drop in repo rate.
Ramji Subramaniam, Sowparnika Projects and Infrastructure: The RBI rate cut is a much needed boost to the rate-sensitive sectors, especially the housing sector. This would amplify the impact of the policy measures announced during the Interim Budget for FY2019-20. With the rate of lending becoming more attractive, we expect a higher demand for loans as they become cheaper for potential home buyers, further boosting the real estate sector.
Surendra Hiranandani,Director, House of Hiranandani: Repo rate cut and the “neutral” stance adopted by the central bank is a welcome move and will positively impact the economy ahead of the elections. Higher interest rates have prevailed for a longer period than necessary even as inflation as per the WPI index remained muted. It held back growth and halted investments in capital-intensive sectors of the economy, particularly in infrastructure. A rate reduction will act as a catalyst and provide the much needed impetus to build upon the various initiatives announced in the Union Budget.