Fresh Rate Cuts by RBI can Boost Housing Demands

April 29, 2009	(Be the first to rate this story!)  Loading ...
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The fresh round of rate cuts by the RBI has once again raised hopes that buying a house might become easier now. While some of the banks have followed the Central bank and brought down their home loan rates, the developers are yet to play their part — cut prices as much as needed for sales to pick up. There can be two reasons for the housing market failing to revive despite lower home loan rates: one, because of a sluggish economy, buyers are not sure about their cash flows, and therefore don’t want to take on the burden of a home loan; two, property prices have not fallen enough to boost demand.

While the government and the RBI have ensured that loan rates are reduced and more credit flows to the sector, developers are expected to respond with reducing prices so that consumers can buy the inventories that have stacked up. Until developers make a correction in prices, the demand will not pick up. Express Estate conducts a debate on whether property prices have seen sufficient correction after several rounds of rate cuts by the RBI. How much more correction is required for the market to revive? Sanjay Verma, executive managing director, South Asia at Cushman & Wakefield, a property advisory firm, says we are yet to see sufficient correction. His company, besides helping clients to turn fixed assets into dynamic ones, also provides real-estate recovery solutions to help them find the best way to deal with distressed assets, portfolios or loans. Speaking against the motion is Rohtas Goel, CMD of Omaxe Ltd, and president of National Real Estate Development Council. Listed on the BSE, his company is one of the largest real-estate development companies in the country.

News Published Under:   Home Loans |

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