Rate cuts give substantial push to property buyer sentiment: Anarock chairman
Realty players and consultants Thursday said the RBI's move to cut lending rate will boost housing demand, but called for more steps to improve liquidity in NBFCs and housing finance companies. CREDAI National President Jaxay Shah hailed RBI's decision, saying that "the consequential reduction in EMI burden for the consumers should pep up the housing demand further."
Anarock Chairman Anuj Puri said the rate cut was overdue and augurs well for the real estate sector which also received a budget bonanza in the previous week. "Rate cuts give a substantial push to property buyer sentiment. Home loan interest rates increased by as much as 5-7 per cent in the last year because the RBI hiked its repo rate by 50 basis points over the same period," he said.
However, he said the sector currently faces a bigger concern of liquidity crisis in NBFCs, which used to fund heavily in housing and commercial projects. JLL India CEO Ramesh Nair said: "The timing of the reduction in policy rate could not have been better. Not only will this improve the overall sentiment, but will also boost the housing market that is already showing signs of recovery."
Cushman & Wakefield India Country Head and MD Anshul Jain said: "We expect that this will cheer the sector with home loans set to be cheaper and even industry loan cycle shall be kickstarted and allow some headroom to developers, especially in the residential space." Tata Realty MD & CEO Sanjay Dutt said this would definitely prove to be beneficial for the real estate sector. However, he said, "we feel that the liquidity crisis in the NBFC sector needs to be addressed immediately as well."
Housing brokerage firm PropTiger Chief Investment Officer Ankur Dhawan said RBI could have given 50 basis points relaxation to industry to accelerate sales growth in residential real estate. Century Real Estate MD Ravindra Pai said: "we hope the banks will pass on the benefits to home buyers, thus boosting their purchase decisions which in turn will help the sector."
NCR developers, which is sitting on over 2 lakh unsold units, also welcomed the decision. Prateek group Chairman Prashant Tiwari and Gaurs group MD Manoj Gaur expected banks to pass on the benefits to its customers in terms of reduction in interest rates on home loans.
Signature Global Chairman Pradeep Aggarwal said this move will be a big boost for affordable housing and help for first time home buyers. Gulshan Homz director Deepak Kapoor said it will help attract more buyers to invest in the real estate sector. Mahagun Director Dhiraj Jain said this is really good news especially for home loan borrowers and developers, while Sushma Group ED Prateek Mittal said this should lower the cost of finance for the developers.
Ajnara CMD Ashok Gupta said this was a much-awaited announcement for both developers and buyers. Saya group CMD Vikas Bhasin said RBI and the finance ministry should direct all banks to transfer the benefits to the end consumer. ATS group firm Homekraft CEO Prasoon Chauhan said the rate cut will provide the right platform for the housing demand to go up, especially in the mid-income and affordable housing segment across cities.
Property brokerage firms like Square Yards, Investor Clinic and Wealth Clinic hailed the RBI decision. Investor Clinic CEO Honey Katiyal said the rate cut will create a positive impact on the overall real estate market. Wealth Clinic MD Amit Raheja said the move will lower the EMI burden of home buyers. "From consumers' point of view, there will hopefully be a reduction on their EMI burden for home and other loans. However, it remains to be seen how quickly and what quantum of reduction is passed on by commercial banks to the consumers," Piyush Bothra, CFO, Square Capital said.
Among Mumbai builders, Omkar Realtors CFO Manoj Paliwal said it is a good move to provide a much-needed impetus in the real estate sector. Poddar Housing and Development MD Rohit Poddar said: "The reduction in repo rate was expected given lower inflation numbers and to stimulate growth in an election year".
(With inputs from agencies.)
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