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RBI’s Firm Stand on Rate Cut Bound to Affect Real Estate Sector
The Reserve Bank of India’s (RBI) third-quarter monetary policy review is not a good news for already sagging real estate sector. There is no change in key interest rates which means that buying a house remains a difficult task.
Sardonically, the review comes at a time when the property market has already been witnessing fewer sales even in some of the top cities. However, some positive measures like HDFC’s recent reduction of 25 basis points in the prime lending rate for home loans, is no doubt, a move which is bound to help borrowers.
According to Real Estate consultancy firm , Jones Lang LaSalle Meghraj, the impact will be felt most in the residential sector as this sector has seen the highest price appreciations and is the most sensitive to lending rates.
Anuj Puri, chairman and country head, JLLM feels that sentiments in the sector market are surely muted at the moment and this will continue until interest rates actually go down. Prospective buyers who were in wait-and-watch mode may continue to postpone their intended property purchases until interest rates go down.
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