New Delhi: Disappointed with RBI's decision to keep interest rates unchanged, real estate players today said housing demand is likely to remain weak in short term and sought government's help to facilitate low-costing funding for buyers and developers.
Realtors' apex body CREDAI expressed disappointment over the RBI policy and demanded a stimulus package, in form of cut in interest and tax rates, to boost housing demand and supply. It also sought the government's intervention to facilitate low cost funding for buyers as well as developers.
"We are disappointed. We were expecting rate cut as inflation has eased," CREDAI President C Shekar Reddy said.
Stating that input costs have increased while demand is moderate in last few months, he said the housing sales could improve only through stimulus in form of reduction in interest rates on home loans, interest subvention and tax rate cuts.
"People are not buying. Unless there is some stimulus, the housing market especially mid-income and low-cost housing will remain slow," he said.
Commenting on the policy, country's largest realty firm DLF group Executive director Rajeev Talwar said: "Buyers are waiting for cut in interest rates which will give them confidence to buy homes. Till that happens, by and large, real estate market will remain stagnant."
"Status quo on policy also means that we are postponing the economic growth story to next financial year," he added.
Property consultant CBRE South Asia CMD Anshuman Magazine said the RBI's status quo stance was largely expected despite GDP growth slumping to 5.3 per cent in the September quarter.
"For the real estate industry, however, the move may be seen as a lost opportunity. A rate cut at this juncture could have been the trigger for housing sales," Magazine said.
Another real estate consulting firm Knight Frank India Chief Economist & Director- Research Samantak Das stated that with recent sales in the real estate sector remaining subdued across the country, stakeholders were hoping for a rate cut this time to initiate traction in the market.
"The real estate sector will have to face the challenges in the short term but going forward we do expect the RBI to revisit its stance in the next review," Das said.
CREDAI Chairman Lalit Kumar Jain pitched for government intervention to facilitate low cost funding for real estate developers and buyers.
CREDAI-NCR President Rohit Raj Modi said: "Industry was expecting an announcement of rate cut which would have induced demand for apartments. In the lack of any announcement, we feel that current mood and momentum of market shall continue in a status quo till any reduction in interest rate happens".