New Delhi: The Confederation of Real Estate Developers' Associations of India (CREDAI), the apex body of realtors in the country, expressed disappointment on Tuesday over the Reserve Bank's policy to keep key rates unchanged as it sought a cut in interest rates to boost housing demand.
"The Confederation of Real Estate Developers' Associations of India is disappointed with the status quo on the RBI policy rates and demands a reduction in interest rates to facilitate lowering of entry barrier and spur demand for the real estate sector," the organisation said in a statement.
There is a need to devise a formula to make home loan rates independent of inflation, keeping in view the mission to provide housing for all by 2022 and exponential impact of the realty sector on triggering the GDP growth, CREDAI said.
"The real estate sector has been dabbling with high cost of land, labour, material, funds & high rates of taxation along with the moderate demand over the last few months. The industry was looking forward to a reduction in interest rates and improved liquidity to usher growth and development," CREDAI president C Shekar Reddy said.
For the fourth time in a row, the apex bank kept key interest rates unchanged on Tuesday, maintaining that it will not cut them unless inflation moderates to anticipated levels, disappointing borrowers and the industry in this festive season.
"The RBI's move of keeping base rates unchanged was expected by the industry," CBRE South Asia chairman and managing director Anshuman Magazine said.
"Gradually weakening inflationary pressures, along with improving performances by the manufacturing, construction and services sectors have been encouraging signs for further economic improvement by the second half of the year. Any reduction in base rates in coming months will be a positive indicator for the real estate sector," he added.
The real estate sector is facing a huge slowdown in demand, particularly in housing segment, since last few years due to high interest rate on home loans and rising property cost.