NEW DELHI: The Reserve Bank of India’s (RBI) decision to keep lending rates unchanged and maintain status quo for the fourth time in a row was widely welcomed by country’s real estate players. However, a majority of them stated that the government should have reduced the rates a bit more to boost demand.
“Under the given market scenario and circumstance, the RBI’s direction on unchanged repo rate is very much on the anticipated lines though a rate cut would have been better to combat the negativity of pandemic-led economic crisis across the industry,” Naredco President Niranjan Hiranandani said. Repo rate stood at record low levels of 4 per cent. RBI Governor Shaktikanta Das mentioned that data for sales and new launches of residential units in major metropolitan centres reflect a renewed confidence in the realty sector.
According to Anurag Mathur, CEO, Savills India, even as there was no downward revision of benchmark lending rates, the accommodative stance should be helpful for real estate as well as infrastructure which was one of the key focus areas in this year’s budget. “Inflation being under the tolerance limit of 6 per cent, gives the reserve bank, the ammunition of further reduction of rates and all-inclusive growth for all sectors including real estate in the upcoming fiscal year,” he added.
Experts added that the measures on enhanced bank funding window for NBFCs will also benefit the stressed real estate. “As seen in the past few months, housing markets in the country have responded well to the low home loan interest rates,” Knight Frank India CMD Shishir Baijal, said. Advance estimates indicate that the economy may contract as much as 7.7 per cent in FY21. “In such a scenario, one
would usually expect RBI to cut repo rates in order to boost consumption. We are certain that rates will be adjusted favourably once the pandemic exigencies ease,” said Anuj Puri, chairman of Anarock PropertyConsultants.