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PTI mumbai India
Updated: 05-12-2018 18:00 IST

Welcoming the Reserve Bank of

India's (RBI) decision to keep the repo rate unchanged, real

estate industry said the move is likely to reinforce

confidence in home buyers resulting in improved sales.

The apex bank Wednesday maintained a status quo on the

repo rate keeping it unchanged at 6.5 per cent.

"The decision is on expected lines and will be a

relief for the real estate industry that has been worried over

a possible rate hike adversely impacting the market," Knight

Frank chairman and managing director Shishir Baijal said.

Since the last Monetary Policy Committee (MPC)

meeting, there has been a big relief with the fall in crude

prices and the strengthening of the rupee, which reduced

inflationary risk, he said.

"With sales and new launches in January-September

period on an upward trend, the residential segment is

definitely showing strong signs of recovery," JLL India

country head Ramesh Nair said.

While back-to-back rate hikes in June and August had

impacted buyers' sentiment in the interim, maintaining the

status quo on policy rate in October and today, will reinforce

the confidence of homebuyers and they will be encouraged to go

ahead with their plans to buy house, he added.

CBRE Chairman, India and South East Asia Anshuman

Magazine said the MPCs decision paves the way for RBI to work

flexibly, supporting overall economic growth by strengthening

bank lending. "We believe that the decision to maintain a

stable repo rate will prove beneficial from a consumption and

lending perspective, thereby boosting economic growth,"

he said.

Commenting on the move, Anarock Property Consultants

chairman Anuj Puri said the politically, an upward revision

would not have served the current government well as the 2019

elections are around the corner.

"From the economic standpoint, a hike in repo rates

would have had a direct impact on home loan rates. High

housing loan interest rates are known deterrents to many

buyers, especially in the affordable segment where higher

interest rates can and do weaken sentiment," he added. chief investment officer Ankur Dhawan

said a hike in rates now would have been detrimental for the

industry which is already going through fund constraints due

to the liquidity issue in non-bank finance companies.

"In fact, industry was hoping if rates could have been

reduced in this meeting to revive the industry. No change in

repo rate is a slightly negative news for the industry,"

he argued.

Paradigm Realty managing director Parth Mehta said

over the year the rate hikes have resulted in higher home

loans thus impacting the demand along with GST impact begin

major deterrent to demand for under construction projects.

Nahar Group vice chairperson Manju Yagnik called the

RBI decision, a well-thought-out move as it will attract more

home buyers with unchanged interest rates on home loans.

Spenta Corporation managing director Farshid Cooper

noted that a rate cut at this stage would have helped in

lowering the home loan interest.

Commenting on the policy decision, Amit Ruparel,

managing director of Ruparel Realty said the sector has not

facing the complications in sales owing to deficit in

physical funds in the market.

"While RBI kept the repo rate unchanged, the market

has been hit hard post the increment in stamp duty by one per

cent on property to fund transport infrastructure projects in

the city. There has been evident liquidity crunch owing to

which festive season also did not fare well. The only way for

real estate to float and sprint is if the levies like GST go

down," he added.

Sai Estate Consultant co-founder Amit Wadhwani said

residential home inventory being available at a great

financial value and RBI maintaining the repo rate will

translate into increase in demand and sales.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)