HYDERABAD: The Confederation of Real Estate Developers’ Associations of India (CREDAI), the apex body for private real estate developers in India, seeks a pro-growth stance on the policy rates. It also demands a reduction in interest rates to put growth and demand on the fast track, and develop the housing sector in the economy which has been completely ignored by the successive governments.
C Shekar Reddy, president, CREDAI- National said,” The real estate sector has been grappling with high input costs, high cost of funds, and a moderate demand, over the last few months. The sector has been ignored and needs immediate focus to build confidence. Now, with wholesale price inflation at under five per cent and retail inflation at around eight per cent, growth stimulus should be injected into the economy with a reduction in repo rates to trigger lowering of home loan rates and lending rates for real estate projects. We are looking forward to a robust 2014 with a stable government at the centre and economic enablers to stimulate growth.”
Reddy further said, “According to the ministry of housing and urban poverty alleviation (MoHUPA) estimates, present housing shortage is 8.7 million units and total housing requirement expected to be 60 million units by 2030 in India. The government needs to support the sector by focusing on development initiatives such as recognising affordable housing as a priority sector for funding and providing added incentive to lenders, developers, and the economy at large. The RBI suggestion to banks for allowing pre-payment of floating term loans without any penalty is a welcome step and should be implemented in the interest of the customers.”
The housing sector is poised to grow manifold in the next decade and a half, and will require a capital investment of about $1.2 trillion. RBI should liberalise norms, increase lending to the real estate sector in line with the global exposure of 24 to 32 per cent, as against the present 12 per cent, and lower interest rates. This will help the sector with high multiplier effect to propel the economy to double digit GDP growth, leading to accelerated capital formation not only in this sector but also in all allied industries.