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Repo rate cut a major boost for real estate market
The industry expects that this move will increase the sales of homes, as loans will be available at a lower cost.
Updated : Apr 05, 2019, 06:40 AM IST
 "Real Estate")
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The real estate industry that has been facing a slow down will get a boost with the cut in the repo rate by 25 basis points. The industry expects that this move will increase the sales of homes, as loans will be available at a lower cost.
Manju Yagnik, vice chairperson Nahar Group and vice president NAREDCO (Maharashtra), said, "Taking into consideration the current market and economic scenario, the RBI's decision to reduce the repo rate by 25bps from 6.25 per cent to 6 per cent today is welcomed by real estate developers. The last rate cut of 25bps was announced in February 2019. The reduction of 50 bps in the last three months should drastically lower the present inflation rates and aid the subdued economic growth of Mumbai and other emerging market economies simultaneously."
He further added that,"This decision will also increase the consumption of homes and will hence restart the investment cycle along with a healthy cash inflow to work with. The decision has brought some respite to the developers and they can focus on clearing out their unsold inventories which will in return also benefit homebuyers who can take loans at lower costs."
According to developers the rate cut has given an impetus to the real estate industry and will boost home buyers sentiments. "The rate cut is expected to substantially enhance home-buyers sentiments and add further impetus to the industry's revival, which needed a push especially post the NBFC Crisis. The EMI burden on homebuyers will also reduce and improve the purchasing power which is expected to provide a huge stimulus to Indian realty. This step by the RBI can be seen as a huge win for homebuyers amidst the government's constant measures of establishing a highly conducive environment for Indian realty," said Satish Magar, president, CREDAI National.
REPO RATE
The RBI’s decision to reduce the repo rate by 25bps from 6.25 per cent to 6 per cent today is welcomed by real estate developers. The last rate cut of 25bps was announced in February 2019.
