NEW DELHI (INDIA): After a 10-month pause, the Reserve Bank of India (RBI) on Wednesday cut benchmark lending rate by 0.25 per cent to over 6-year low citing reduction in inflation risk, a move that will lower interest on home loan.
Reactions by industry leaders on RBI’s monetary policy outcome:
Ravindra Pai, MD, Century Real Estate Holdings Pvt Ltd
“It is a welcome move, especially to combat the odds industry was seeing in recent times. Cheaper home loan definitely will boost positive sentiments amongst the home buyers and in turn will help the developers to gain the momentum.
With RERA ushering in, budget housing getting infrastructure status and RBI rate cuts, we certainly feel good times for the industry are just a stretch away and a matter of a very short time.”
Vinod Rohira, MD & CEO, Commercial Real Estate & REIT, K Raheja
The RBI policy review of the financial year 2017-18 has witnessed a change in the repo and the reverse repo rate which will give a much-needed impetus to the realty sector. With the recent change in reforms and policies, this rate cut comes as a blessing improving buyer sentiments. The steps taken are on the right path to address the economy, and we are optimistic that the banks will also pass on the benefit to the consumers, which in turn will help propel the growth of the industry.
Sanjay Shenoy, Joint Managing Director, Legacy Global Projects
“Reduced cost of credit is excellent news for the real estate industry. Eased inflation and GST has brought about the very impact we were looking forward to. The real estate sector has been working hard to bring about increased transparency and ease of doing business with months of toil to implement RERA. The announcement is the very catalyst required to attract investors and spark about a surge in demand, ahead of the auspicious season of festivities to start post August.” – Mr. Sanjay Shenoy, Joint Managing Director, Legacy Global Projects.
Brotin Banerjee, MD & CEO Tata Housing Development Company Limited
“ We anticipate that the rate cut announced today by .25 BPS, coupled with commensurate benefits for borrowers, will impact home loan rate positively and enhance the consumer sentiment. With the market view calling for measures that encourage investment to boost growth numbers, and with the installation of a regulatory regime for the real estate sector, we expect this move to keep the stimulus on for potential home buyers to invest, and to benefit current borrowers.”
Anshuman Magazine, Chairman, India and South East Asia, CBRE
“The RBI’s decision to cut the repo rate by 25bp to 6% – a 7 year low – is in line with industry expectations amidst low inflationary trends. We believe that this cut will result in making housing loans cheaper and help credit offtake in the housing sector. In the long run this will provide further impetus to the segment and help in rejuvenating housing sales. Coupled with the other structural reforms introduced in the recent past, this announcement will further enhance activity levels in the real estate and construction sector.”
Ashwin Sheth – Chairman & Managing Director, Sheth Corp
“Although the RBI has maintained its neutral stance, the indication towards easing of policy rates and the upcoming festive season will renew further interest in the real estate sector.
“The reduction in the repo rates will help in bringing down the home loan interest rates which in turn is likely to bring in some amount of relief to the homebuyers. But, the banks will also have to pass down the benefit to the homebuyers to encourage the prospective buyers to move a step closer to purchase their dream home. Interest rate is one of the important factors as the equated monthly installments (EMI) is directly linked to it. Therefore, if the banks pass on the benefits and the EMIs fall, we feel the demand for the housing should witness momentum as far as buying new properties are concerned.
Kapil Wadhawan, Chairman and Managing Director, DHFL
“RBI’s decision to reduce the repo rate by 25 bps to 6% is a welcome step and will help propel India’s economic growth. With the inflation rate falling to one of its lowest during the quarter, the Central Bank’s move is in sync to encourage spending especially in sectors like housing and infrastructure. Additionally, it sends out a positive message to the international community on the attractiveness of the Indian economy with robust macro-economic growth indicators.
We believe this move by the RBI along with other macro-economic policy decisions of the government will help in expanding the lower and middle-income housing finance sector in a more democratic manner. DHFL will continue to bring to reality its founder Late Shri Rajesh Kumar Wadhawan’s vision of affordable home ownership for every Indian.”