Realty Players Seek Govt Stimulus As RBI Disappoints

New Delhi
Realty Players Seek Govt Stimulus As RBI Disappoints

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."

Modi said that the housing market remained sluggish during the festive season.

Commenting on the policy, Cushman & Wakefield Executive Managing Director (South Asia) Sanjay Dutt said: "RBI's indication that benchmark lending rates could come down from early next year is extremely positive for the industry and we expect commercial banks to do their bit by taking the right steps in this direction to boost housing sales."

RICS Global Managing Director – Emerging Business and MD- South Asia Sachin Sandhir said that a rate cut at this stage would have further galvanized the market sentiment and helped in growth. "Rate cut would have helped companies in the real estate space too which are currently reeling under high levels of debt."

Realty firm Sare Homes MD David Walker said the industry is looking forward to an interest rate cut as inflation has fallen significantly and the real estate market continues to be slow.

Lotus Green Developers Vice Chairman P Sahel said the entire industry was expecting rate cuts. "Nevertheless, we expect that the central bank will decrease the rates further at an appropriate time giving breather to the realty sector."

TDI Infracorp COO Nitesh Kumar hoped that the wait won't stretch too long before the central bank brings down rates as macro-economic indicators have been improving and inflation is coming down. AVJ Group CMD Vinay Jain said it is "only a matter of time" before home loan rates come down.

Ramprastha group CEO Nikhil Jain said that the industry would have to move on and build on the momentum provided by the positive announcement of FDI in real estate.

Paras Buildtech Director Aman Nagar said: "Despite pressure from government, if Mr Rajan has kept the policy rates unchanged, there must be a sound reasons for that."

"His dovish tone and acknowledgment for the scope of monetary easing portrays a bright future for next fiscal and we could see a significant rate cut three months here on," Nagar added.

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