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Realty sector hope for revival in housing sales after rate cut

Friday, February 08, 2019

Liquidity crisis-hit real estate industry Friday welcomed the decision of the RBI to reduce the repo rates saying the 'unexpected' move will give a fillip to the sector especially after sops in the recent interim budget.

RBI Governor Shaktikanta Das slashed the repo rates by almost 25 bps to 6.25 percent, a move which the real estate sector was eagerly waiting for much needed push for the sector which is reeling under liquidity crunch after the recent IL&FS crisis.

Knight Frank chairman and managing director Shishir Baijal said that as a result of this reduction, banks may pass on the benefits of the revised rates to the end consumer of loans, thereby making it easier for them to make their purchase decision.

National Real Estate Development Council (NAREDCO) president Niranjan Hiranandani said the decision will not just enhance liquidity in the economy but also boost investment and give the economy a positive growth phase.

"From a real estate perspective, this will impact home loan interest rates, and reduced EMIs are among the best harbingers of positive sentiment, leading up to further off- take of real estate across India," he said.

Echoing similar views JLL India CEO and country head Ramesh Nair said with residential sales and new launches on an upward trend in 2018, genuine home buyers are now actively considering a serious buying decision.

"Overall, this is going to have a positive impact on the housing market and we expect sales and launches to gain further momentum on the back of improved economic scenario," he said.

CBRE chairman and CEO, India, Anshuman Magazine said, "It will spur investment and boost demand. The rate cut coupled with the budget stimulus for the economy, and the real estate sector in particular, will impact consumer sentiments positively."

“The new rate cut, announced for the first time since 2017, will pave the way for cheaper home loans for home buyers 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. All in all, it a positive and a much needed move for the Indian real estate industry and will bring much joy to the real estate developers as well as property investors,” said Prashant Solomon, Managing Director, Chintels India Pvt. Ltd and Hon. Treasurer, CREDAI NCR and Convenor of CREDAI National (Media and PR Committee).

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