Mumbai: Days after sops announced by the Centre in the annual budget, the realty players said the RBI’s decision to maintain REPO and reverse REPO rates and low interest rate will help build a strong and broad-based demand momentum. Further, they believe that the extension of date of commencement of commercial operations (DCCO) of project loans for commercial real estate will give a much- needed relief to cash starved developers and will also ease the time for maintaining and managing their cash flows. They argue that RBI’s stance is certainly good for the realty sector and home buyers.
‘’With a growth focussed budget, that further supports the government’s aim of nurturing the economy, this status quo will further allow demand creation including for high involvement products like real estate. As seen in the past few months, housing markets in the country have responded well to low home loan interest rates,’’ said Shishir Baijal, CMD, Knight Frank India.
However, NAREDCO (National) President Niranjan Hiranandani said although the RBI’s direction on unchanged repo rate is very much on the anticipated line, a rate cut would have been better to combat the negativity of pandemic led economic crisis across the industry. ‘’The observation that sales and new launches of residential units in major metropolitan cities reflect a renewed confidence in the real estate sector reinforces the need for further positive booster dose to strengthen is core revival that enacts a multiplier effect on 270 allied industries,’’ he added.
ANAROCK Property Consultants Chairman Anuj Puri observed that the real estate industry always aspires for reduced interest rates. ‘’ Housing demand is reviving, and this demand needs to be fostered. However, the RBI’s current stance is absolutely justified, given the unique circumstances. We are certain that rates will be adjusted favourably once the pandemic exigencies ease,’’ he noted.
According to Poddar Housing MD Rohit Poddar, H2 of 2020 has been one of the best periods for real estate considering the growth that has been achieved, the decision to keep the rates unchanged will further help in continuing the momentum.
Further, the Guardians Real Estate Advisory Chairman Kaushal Agarwal said the realty sector was hoping against hope for a further reduction in the repo rate after a budget that had limited announcements for it. ‘’The reduction would have helped spurred growth in demand for real estate assets that has been severely hit as a result of the pandemic and subsequent lockdowns. Currently, apart from the reduction in stamp duty charges in some parts of the country, the all-time low housing loan rates have given the much-required fillip to sales activity in the last quarter. The reduced repo has the potential to boost consumption in the economy and help reduce dependence on government spending," he opined.