Coming in the midst of festival season and a few weeks before Diwali, the RBI decision to cut repo rate by 25 bps has been unanimously hailed by the real estate industry. While welcoming the decision announced by the new Governor Urjit Patel on Tuesday, most of the developers have expressed hope that banks will now pass on the benefit to consumers by cutting the home loan interest rates.
Manoj Gaur, President Credai-NCR & MD, Gaursons India Ltd., said, “With the ongoing festive season, realty sector of our country could not expect a better news than a repo rate cut”. Adding further, Gaur said, “At this point of time when the sentiments are positive and people are eager to buy and invest in property, banks will now cut interest rates that will allow buyers to get their EMIs reduced.”In his view, the demand will witness a rise in the current festive season which will allow the developers to clear inventory in major metro cities.
According to Deepak Kapoor, President, Credai Western UP & Director, Gulshan Homz, a fall in lending rates will promote the sentiments in the market and allow people to strategise their upcoming purchase as the maximum purchase decisions involving big amounts are made during this period. “RBI has played its part well today and now the ball is in banks’ court. This will not only enhance the purchasing power of the customers but also allow them to even go ahead with a better purchase,” he said.
Kushagr Ansal, Director, Ansal Housing, said this rate cut has come at the “most opportune moment’. He added, “There had been many positives building up to this festive season like the RERA already passed, GST to be implemented by the onset of the next financial year, considerable reduction in FDI limitations, the only stone left unturned was a rate cut by the apex bank. Now, with that done, there could have been no better sentiment-enhancer for the already-upbeat mood in the real estate sector”.
In Mahagun Group Director Dhiraj Jain’ opinion, there exists a direct relation between reduction in lending rates by banks and an increase in demand for property. “It is just a matter of proper timing by the banks while adjusting the rates. The festive season has just commenced where massive demand is observed every year, and this is the time when potential customers plan and allocate their funds for the big purchase,” he said.
Vaibhav Jain, CMD, Rise Group, said, “RBI has been extremely pro-active in terms of bringing relief to the economy and pushing the banks forward to provide final benefit directly to borrowers through reduced EMIs. Real estate sector in particular was in dire need of a repo rate reduction as we are standing in the final festive season of the year. Sentiments will now become better as customers will be expecting banks to lower their rates that will be profitable for them prior to a big purchase such as, property”.
Rajesh Goyal, Vice-President, Credai Western UP & MD, RG Group, said, “This move was pretty much on the cards looking at the economic recovery witnessed over the last couple of quarters”. For long, he said, there had been no reduction offered by the other banks “but with the festive mood already set in and people looking for better and better options, banks can cash in well and allow further support to the real estate sector”.
Mr. Gaurav Gupta, General Secretary, CREDAI Raj Nagar Extension, said, “It is a welcome move by RBI and is being considered an amazing gift by RBI at this festival time. We hope that the reduced rate would have a positive impact on real estate sector and build up the customer confidence to a large extent. Developer community has already geared up for mission possession and therefore this is a win-win situation for developers as well as home buyers. RBI has slashed enough base rate which will encourage investors and end-users to invest in property market. We also expect that there could be further rate cuts ahead in the times to come.”
According to Mr. Prashant Tiwari, Chairman Prateek Group, “Reduction in the repo rate was an awaited move which will improve the overall market sentiments. The result of this rate cut will be reaped by home-buyers in the form of reduced home-loan interest rates. Festival season along with reduced interest rates is going to be more joyous for home buyers. We hope that the benefit of reduced rates be passed on to borrowers by the lending banks soon.”
Mr. Avneesh Sood, Director EROS Group,said, “The reduction of interest rate by 25 basis points was on the expected lines. The realty sector is expected to get a great push as it would prompt prospective home seekers to invest in properties. Home buyers will get more economical and pocket friendly deals as festive offers are already raining and now a rate cut will add more happiness to their festivity spirit. All this just arrived at the perfect time and hopefully will bring bliss to all the stakeholders. It now only remains to be seen when and how banks reduce their rates for end-users so that there EMI’s also fall.”
Mr. Akshay Taneja MD, TDI Infratech Ltd, said, “We welcome the new Governors move to slash down interest rates by 25 bps. This rate cut has made the festive season more blissful for us and our customers as well. The drop in Repo rate will certainly improve the market sentiments and will give the required thrust to real estate market. We are expecting to see increase in property demand and revival in real estate sector with such a positive move. Moreover, with fall in interest rates, the demand for home loans will also continue to grow stronger. We hope home buyers will take full benefit of this golden opportunity as there couldn’t be a better time than this to invest in property market.”
According to Sanjay Rastogi, Director Saviour Builders, “Led by our expectations, reduction in interest rates is a welcome move by RBI especially at this auspicious time of festivals. The revision in rates is very much favorable for real estate sector and will boost the demand for properties. Real estate, being a rate sensitive sector will gain a lot from the reduced repo rates. The rate cut holds a great significance as the banks will now incise their interest rates on loans and the benefit will be passed to borrowers at last.”
Mr. Parveen Jain, President NAREDCO said “RBI’s move to reduce the repo rate cut would provide a major fillip to real estate Sector. At peak of the festive season,this move will further benefit to Home loan Seekers. Rate cut would also boost the sentiment in the market and help revive housing sales. We do hope that banks will implement it immediatelyand pass on the benefit to the end users.
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