RBI kept key interest rates unchanged and stuck to its accommodative stance amid concerns of rising COVID-19 infections that could derail the nascent economic recovery.
The real estate industry on Wednesday hailed the RBI’s decision to keep the key policy rates unchanged and provide additional liquidity of Rs 10,000 crore to the National Housing Bank (NHB) but said the apex bank should ensure that the fund is being made available to cash-starved developers to complete projects.
The Reserve Bank of India (RBI) kept key interest rates unchanged and stuck to its accommodative stance amid concerns of rising COVID-19 infections that could derail the nascent economic recovery.
“By keeping the repo rates unchanged, RBI has maintained an accommodative stance. The RBI Governor”s assurance to provide adequate credit by ensuring ample liquidity & announcement of Rs 10,000 cr additional liquidity to NHB must be passed onto the real estate as the sector has been struggling to source funds for projects,” CREDAI National President Harsh Vardhan Patodia said.
Anshuman Magazine, Chairman and CEO, CBRE India, South- East Asia, Middle East and Africa, said,“Maintaining a status quo for the fifth time, the RBI’s decision of keeping the repo rate unchanged at 4% is a welcome move which has been undertaken with the aim of ensuring economic revival, while ensuring that inflation remains within the target going forward.
In addition to maintaining its accommodative policy stance, the Central Bank has also announced additional measures such as special liquidity facilities for all India financial institutions including INR 10,000 crore for the National Housing bank (NHB), timeline extensions of six months for banks on-lending to NBFC’s, constitution of a committee to comprehensively review the working of asset reconstruction companies (ARCs), extension of TLTRO On Tap scheme deadline by six months, amongst others. These measures are likely to assist the revival of the real estate sector while fast tracking economic recovery.”
The central bank has announced additional measures such as special liquidity facilities for financial institutions, including Rs 10,000 crore for the NHB, he said, adding these measures would assist the revival of the real estate sector.
NAREDCO President Niranjan Hiranandani said: “The unchanged repo rate by the RBI which signals to keep the borrowing momentum buoyant. Also, pegging the real GDP forecast at 10.5 per cent reflects Indian economic recovery to be healthy, self-sustainable and resilient.”
Sanjay Dutt, MD and CEO, Tata Realty and Infrastructure Ltd, said this is the fifth time in a row that the RBI has tried to maintain an accommodative stance and it will certainly play an important role in the long-term recovery of the sector.
“Considering that real estate forms the backbone of several other sectors, we urge the government to introduce measures that truly uplift the sector, such as granting of industry status, allowing FDI in RTMI (ready-to-move-in) projects and extending the tax benefit from affordable to mid housing,” he added.
Ashish R Puravankara, managing director, Puravankara Ltd, said the unchanged repo rate will be integral in driving investments to the real estate sector and enable more home buyers to enter the market with ease.
Manoj Gaur, CMD, Gaurs Group welcomed the RBI policy but felt more measures need to be taken to revive the sector.
Mumbai-based builder Spenta Corporation’s MD Farshid Cooper said a rate cut would have been beneficial for the consumers.
Among property consultants, Housing.com and PropTiger CEO Dhruv Agarwala said the RBI”s decision is on expected lines. He hoped that lenders would take a cue from the RBI”s move to leave rates unchanged and continue to offer homebuyers the benefit of a historically low interest rate regime.
Anuj Puri, Chairman, ANAROCK, said home loan rates may remain stable.
However, he said: “The incentive period for lower rates (starting from 6.7 per cent) expired on March 31. SBI has already reverted to their normal rates and other banks will also follow suit. This may have some impact on the housing demand, especially in Maharashtra where the stamp duty cuts coupled with lowest-ever home loan rates had significantly boosted housing demand.”
Savills India CEO Anurag Mathur said “The Reserve Bank of India has maintained an accommodative stance leaving the repo and reverse repo rate unchanged despite the marginal rise in inflation in recent months. The real estate market, especially the affordable housing segment, will continue to benefit from the record low-interest rates. In addition, the central bank’s decision to provide liquidity support of Rs 10,000 Cr to the National Housing Bank is a welcome move that will help improve lending in the affordable housing segment. Though the overall growth prospects remain encouraging with a GDP growth rate expectation of 10.5% in FY 22, the ongoing economic revival is subject to the magnitude of the second wave of infections and localised lockdowns.”
Samantak Das, Chief Economist and Head of Research & REIS, JLL India, said the resurgence of the pandemic and resultant concerns of its impact on economy and businesses demanded a resilient approach.
Rajani Sinha, Chief Economist and National Director – Research, Knight Frank India, said: “The RBI has taken reassuring steps to infuse additional liquidity into the housing sector through the interventions of increased financing to National Housing Bank and extension of priority sector tag for bank funding to NBFCs for housing loans.”
“The RBI and especially the MPC needs to be commended for maintaining its accommodative stance for more than a year now. Its approach towards tackling the situation created by the pandemic and steps taken to help revive the economy, will go down in history as being one of the finest,” said Kaushal Agarwal, chairman, The Guardians Real Estate Advisory.
Source: PTI
(This story has been published from a wire feed without modifications to the text. Only the heading has been changed)
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