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« Unitech to Mobilise Rs 2,500 cr to retire debt partly | Home | Housing Sector Gets a Priority Boost »

Real Estate India Welcomes RBI’s Decision

Welcoming the RBI’s decision to provide a stimulus package for the housing sector, realty firms on Saturday said banks should pass on the benefit of soft interest rate regime to home loan seekers as well as the industry. They also welcomed th e RBI’s decision to give “priority sector” status to housing loans up to Rs 20 lakhs, which in their view would lead to increased demand for apartments in the segment. Commenting on the RBI’s decision to cut repo and reverse repo rates, global real estate consultant Jones Lang LaSalle Meghraj Country Head Anuj Puri said: “It was much desired and expected. Interest rates on housing loans should come down”. He, however , said the government needs to keep a close watch and intervene at regular interval. “This is the first of the many steps that they will have to take to bring confidence”. RBI today cut short-term lending rate (repo) by one percentage point to 6.5 per cent. It also slashed the overnight rate (reverse repo) by a percentage point to 5 pe r cent. RBI also classified housing loans below Rs 20 lakh as lending to priority sector.

Another realty consultant Cushman & Wakefield Executive Managing Director (South Asia) Sanjay Verma said: “This will essentially work towards maintaining liquidity and reducing overall lending rates. This will help in getting back some demand into the housing sector”.Parsvnath Chairman Pradeep Jain said interest rates should come down after this decision. He pointed out that banks had not cut the rates after RBI’s earlier decisions and demanded that the central bank should intervene. Unitech, the country’s second largest real estate firm, General Manager (Corporate Planning and Strategy) R Nagaraju said RBI’s decision to cut repo and reverse repo rates is good for the real estate sector as this might lead to a fall in interest rates.

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