Realty sector eyes housing sales revival after rate cut

Mumbai: Liquidity crisis-hit real estate industry Friday welcomed the decision of the RBI to reduce the repo rates saying the 'unexpected' move will give a fillip to the sector especially after sops in the recent interim budget.

RBI Governor Shaktikanta Das slashed the repo rates by almost 25 bps to 6.25 percent, a move which the real estate sector was eagerly waiting for much needed push for the sector which is reeling under liquidity crunch after the recent IL&FS crisis.

Knight Frank chairman and managing director Shishir Baijal said that as a result of this reduction, banks may pass on the benefits of the revised rates to the end consumer of loans, thereby making it easier for them to make their purchase decision.

National Real Estate Development Council (NAREDCO) president Niranjan Hiranandani said the decision will not just enhance liquidity in the economy but also boost investment and give the economy a positive growth phase.

"From a real estate perspective, this will impact home loan interest rates, and reduced EMIs are among the best harbingers of positive sentiment, leading up to further off- take of real estate across India," he said.

Echoing similar views JLL India CEO and country head Ramesh Nair said with residential sales and new launches on an upward trend in 2018, genuine home buyers are now actively considering a serious buying decision.

"Overall, this is going to have a positive impact on the housing market and we expect sales and launches to gain further momentum on the back of improved economic scenario," he said.

CBRE chairman and CEO, India, Anshuman Magazine said, "It will spur investment and boost demand. The rate cut coupled with the budget stimulus for the economy, and the real estate sector in particular, will impact consumer sentiments positively."

Nahar Group vice chairperson Manju Yagnik opined that the decision of changing the stance from calibrated tightening to neutral may welcome more positive changes in the forthcoming policies.

"After a sentiment-boosting budget, the cut in the repo rate is yet another positive step for the real estate sector. However, the impact of this hinges on the willingness of banks to pass on the benefit to consumers in a tight liquidity environment," Colliers International India head- consulting Aashish Agarwal said.