Real estate players and analysts on Tuesday welcomed the Reserve Bank's move to cut short-term lending rates, but said that more such steps are needed to bring growth back to the sector.
Confederation of Real Estate Developers Associations of India (CREDAI), however, termed RBI's repo rate reduction by "just" 25 basis points as a "missed opportunity" and urged it to ease funding options in realty sector.
"One would have expected RBI to be realistic and appreciate the fact the real estate industry supports hundreds of other industries and hence plays a major role in rejuvenating the economy, hit by job losses and dwindling investments," CREDAI National President Lalit Kumar Jain said.
The RBI should take steps to ease funding for real estate sector at much lower rates in the interest of millions of home seekers, and ease Cash Reserve Ratio for banks to further enhance liquidity in the system, he added.
Jain said: "It is high time that we looked at enhancing growth by infusing liquidity and going in for rate cut... We cannot hope to make housing affordable for the masses with such restrictive policies...the continued stubborn approach of RBI is shocking."
Leading realty consultant Cushman & Wakefield (C&W) said the apex bank has taken the right step to boost economic growth through reductions in key interest rates, although the reduction of 25 basis points is a small one.
"If this rate cut also translates in further lowering of loan interest rates by banks for businesses and for home buying consumers, then we can definitely expect to see some momentum in a slow and anxious real estate market
that was left largely disappointed by the Union Budget
," C&W Executive Managing Director (South Asia) Sanjay Dutt said.
Welcoming the rate cut, CHD Developers
Managing Director Gaurav Mittal said the step is slated to be beneficial for both the buyers as well as the developers, who have been struggling with cash crunch in recent times.
Real estate private equity
firm Fire Capital Chief Executive Officer Om Chaudhry said reduction in lending rates will help the sector with low interest on home loans.
The 3C Company Director (Sales and Marketing) Brijesh Bhanote said: "Since the beginning of year, the second time repo cut clearly indicates the concerns of central bank to support the revival progression of Indian economy and to narrow the fiscal deficit."
M3M India Director Pankaj Bansal said a further reduction expectation will give encouraging outlook to the economy and the developers can expect more inflow towards equity market.
Realty research firm PropEquity Chief Executive Officer Samir Jasuja said the repo rate cut will help boost the real estate sector by providing the home buyers an access to home loans at cheaper rates, thereby stimulating demand.
Wave Infratech Executive Director R K Jain said the mid- quarter monetary policy review by RBI is on expected lines and the company expects home loan
interest rates to get cheaper, which will help reviving the housing demand in future.
Ramprastha Group Chief Executive Officer Nikhil Jain said: "It will not only help the realtors for fund allocation but also help the people at large in terms of liquidity and lower interest rate.
"As developers, we were waiting for progressive measures from the apex bank to mobilise the liquidity in the market which has been a baited breath for us for long."