Boost liquidity in housing, realtors urge Reserve Bank
Real estate bosses hail RBI stance on keeping rates intact
New Delhi: THE real estate industry on Wednesday hailed the Reserve Bank of India (RBI)'s decision to keep the key policy rates unchanged and provide additional liquidity of Rs 10,000 crore to the National Housing Bank (NHB) but said the apex bank should ensure that the fund is being made available to cash-starved developers to complete projects.
The RBI kept key interest rates unchanged and stuck to its accommodative stance amid concerns of rising Covid-19 infections that could derail the nascent economic recovery. "By keeping the repo rates unchanged, RBI has maintained an accommodative stance. The RBI Governor's assurance to provide adequate credit by ensuring ample liquidity and announcement of Rs 10,000 cr additional liquidity to NHB must be passed onto the real estate as the sector has been struggling to source funds for projects," Credai National President Harsh Vardhan Patodia said. Anshuman Magazine, Chairman and CEO, CBRE India, South- East Asia, Middle East and Africa, said the RBI decision has been undertaken with the aim of ensuring economic revival, while ensuring that inflation remains within the target going forward.
The central bank has announced additional measures such as special liquidity facilities for financial institutions, including Rs 10,000 crore for the NHB, he said, adding these measures would assist the revival of the real estate sector. NAREDCO President Niranjan Hiranandani said: "The unchanged repo rate by the RBI which signals to keep the borrowing momentum buoyant. Also, pegging the real GDP forecast at 10.5 per cent reflects Indian economic recovery to be healthy, self-sustainable and resilient." Sanjay Dutt, MD and CEO, Tata Realty and Infrastructure Ltd, said this is the fifth time in a row that the RBI has tried to maintain an accommodative stance and it will certainly play an important role in the long-term recovery of the sector.
"Considering that real estate forms the backbone of several other sectors, we urge the government to introduce measures that truly uplift the sector, such as granting of industry status, allowing FDI in RTMI (ready-to-move-in) projects and extending the tax benefit from affordable to mid housing," he added. Ashish R Puravankara, Managing Director, Puravankara Ltd, said the unchanged repo rate will be integral in driving investments to the real estate sector and enable more home buyers to enter the market with ease.
Manoj Gaur, CMD, Gaurs Group welcomed the RBI policy but felt more measures need to be taken to revive the sector. The real estate sector needs several measures, and we expect a push from RBI to the banks to disburse loans to the sector, said Uddhav Poddar, MD, Bhumika Group. Ram Raheja, director, S Raheja Realty, said this will continue to further foster the demand for housing. "Housing markets have responded well in the past to lower home loan rates, stamp duty reduction and other rebates." Mumbai-based builder Spenta Corporation's MD Farshid Cooper said a rate cut would have been beneficial for the consumers. Among property consultants, Housing.com and PropTiger CEO Dhruv Agarwala said the RBI's decision is on expected lines. He hoped that lenders would take a cue from the RBI's move to leave rates unchanged and continue to offer homebuyers the benefit of a historically low interest rate regime. Anuj Puri, Chairman, ANAROCK, said home loan rates may remain stable.
However, he said: "The incentive period for lower rates (starting from 6.7 per cent) expired on March 31. SBI has already reverted to their normal rates and other banks will also follow suit. This may have some impact on the housing demand, especially in Maharashtra where the stamp duty cuts coupled with lowest-ever home loan rates had significantly boosted housing demand." Savills India CEO Anurag Mathur said the RBI kept repo rate unchanged despite the marginal rise in inflation in recent months. "The real estate market, especially the affordable housing segment, will continue to benefit from the record low interest rates."