Welcome move, immediate action needed: Realtors

NEW DELHI: The fourth repo rate cut this year by the Reserve Bank of India (RBI) and the biggest one for now has sent a signal of hope in the real estate sector.nnA 35 basis point cut by the RBI and enhanced exposure limit to single Non Banking Financial Company (NBFC) is likely to address the liquidity problem being faced by the sector.nnRealtors are hopeful that now the banks will work towards providing funds for real estate so that the stuck projects can get a kick start. Also, a likelihood of reduced EMIs on home loans has also come at a time when festive season is near. The timing seems right and realtors are waiting for increased sales that will provide the much-needed boost.nnWhile, the move is likely to benefit all segments of housing, it is expected that the reduction will help the real estate of tier II and tier III cities especially. However, the benefits would depend upon the quantum of reduction banks announce in the coming days. Before the latest reduction, RBI has reduced policy rates by 75 bps, but commercial banks have reduced rates by only 29 bps as per the apex bank data.nn?Reduction in repo rate by another 35 basis points will bring down construction finance costs and ease out home loan rates, giving yet another boost to the real estate sector. Apart from this, RBI has also enhanced exposure limit of banks to a single NBFCs, which in turn would boost credit to real estate sector and tackle the liquidity crunch. The step was necessary and the Govt and RBI have taken timely steps to ease the liquidity situation to some extent. We expect some more measures in the coming days,? says Uddhav Poddar, MD, Bhumika Group.nn?With the fourth cut in a row, the repo rate stands the lowest level in the past nine years. This is good news especially for home loan borrowers with the RBI bringing down the key policy rate for the 4th time in its monetary policy review, signalling lower interest rates. Now, we are eying on banks to pass on the benefit of this rate cut to the respective borrowers of home loan. Once banks reduce the level of interest rates, it will eventually witness the increase of demand for homes in real estate sector,? says Dhiraj Jain, Director, Mahagun Group.nn”The involvement of the govt through finance ministry and close coordination with RBI should ensure that the rate cuts of 35BPM is speedily passed on by the banks to the homebuyers thus resulting in reduction of EMI and cost of loans. This reduced cost of borrowing should regenerate the interest of the homebuyers thereby adding to demand for home purchase and consequent reduction in unsold inventory. This will very actively contribute to addition in the GDP in the country and restoration of asset creation and asset value in the realty sector.,” says S J Singh Chairman and MD of Urbainia Spaces Pvt. Ltd.nn?The rate cut by 35 basis points is a positive move thus providing the required impetus to the economy of the country. The much needed step taken by the Apex Bank aims to curb the liquidity situation. However, we expect the banks to transmit the rate cuts to the borrowers to get the desired results of this constructive move,? says Ashish Bhutani, CEO, Bhutani Infra.nn?The cutting down of repo rate of 35 bps to 5.4% by the central bank is an encouraging step to boost the economy of the country. The positive move is in line with the market?s expectations and will certainly smoothen up the liquidity crunch to a great extent. It has come as a good news for the home loan borrowers and will boost the real estate sector. Now, we are eying on banks to pass on the benefits of this rate cut so the home loan borrowers can avail the advantages and utilize it realize their dream of buying a house,? says Anupam Gupta, Sales and Marketing Director, GBP Groupnn?The fourth successive cut in the policy rates is a welcome step. This will benefit the economy as a whole as well as the entire real estate industry, which is one of biggest employment generator in the country. The whole financial system, particularly the NBFC sector is facing some stress. In absence of bank financing, it is the NBFCs which have accounted for large share of funding to the realty sector. It was apt for the apex bank to announce measures to reduce the stress on NBFCs, which is vital for the quicker revival of the economy,? says Pankaj Jain, Managing Director, Realistic Realtorsnn?Four consecutive repo rate cuts are not only a positive outcome for the real estate sector but also for the eligible new home borrowers who can take advantage of the subsidies scheme under PMAY (Pradhan Mantri Awas Yojana). More money available in banks at a lower cost will result in increased purchasing power as there will be a lower EMI burden on the buyers. It will also lighten the liquidity crunch and lower the cost of finance for the developers,? says Parveen Aggarwal, Founder and Chairman, Signature Sattva.nn”We see a situation where sales, launches and completions are on the rise. Back to back policies are all a sign that real estate is a priority sector for the government. These are positive indications and we are confident that soon the liquidity crisis will be over. Lakhs of stuck houses will come in the market, which will further provide boost to real estate and the confidence of buyers which has already improved after RERA will further get cemented,” says Rajesh Goyal, MD RG Group and Vice-President, CREDAI NCR.nn?With the fourth rate cut in a row the real estate sector is expected to escalate further, benefiting not only the developers but also the home buyers. The Apex Bank has taken the much needed step to curb the prevailing liquidity situation. With lower repo rates banks would be able to set the direction and reduce the level of interest rates, which eventually witness the increase of demand for homes in real estate sector,? says Harinder Singh Hora, Managing Director, Reach Group.nn?Seekers of Affordable housing get a lot of benefits and now with this rate cut they will be able to cut down on EMIs. This is a positive step for the segment, which has the maximum demand. Affordable housing projects were already getting good response but now with the latest rate cut, the people will get more benefit. It is always heartening to see the EMI burden coming down as we want our buyers to enjoy their dream home with relaxed mind. We welcome the rate cut by the RBI, which is a fourth one this year, and shows the positive intention of the premier body to work towards the solutions,? says Rajat Goel, Joint Managing Director, MRG World.nn”A lot of buyers were waiting for the things to smoothen out and now everything seems to be moving towards the right direction. The latest cut by RBI is an indication that the authorities are serious to make real estate get on the fast track. However, steps should be taken by keeping in mind the issues such as high prices in major cities and lack of funds for real estate. The need is to come up with a onetime major decision that can instantly bring a turnaround,” says Harvinder Singh, MD, Sikka Group.nn?The fourth consecutive repo rate cut from the RBI is in lines with the expectations. We hope that the reduction is passed on by the banks to the home buyers. Lower interest rates, along with the recent reduction in GST rates for under construction properties, should provide the fillip to end-user demand. On top of it the upcoming festival season might turn out to be a good one for real estate,? says Dhiraj Bora, Head Corporate Communication, Paramount Group.