Hail RBI!

Realtors' bouquets for Shaktikanta Das

Unchanged repo rate helps low interest regime, they say

NAREDCO says lot needs to be done to mitigate the overall adverse impact of the pandemic.

MUMBAI, Aug 6 (The CONNECT) – Realtors have welcomed RBI decision to keep repo rate unchanged and the central bank’s positive outlook in view of the aggressive vaccination drive to check COVID.

The continuation of the 4% repo rate encourages the prevailing low interest rate regime on home loans and should augur well as un-lockdown process continues and buyers begin to make enquiries.

Here is a snapshot of the responses from the industry:

Ashok Mohanani, President - NAREDCO Maharashtra: "The economic growth needs to be supported through monetary policy and this is the foremost reason that the RBI has continued its accommodative stance. It has focused on balancing liquidity in the financial system while keeping inflation within its target. The interest rates will continue to be at a record low for some time, however, the banks should pass on the benefits to the customers which will boost real estate demand. Although both the Central and the State governments are focusing on reviving the economy with various policy measures, a lot needs to be done to mitigate the adverse impact of the overall pandemic."

Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Hon. Secretary, CREDAI MCHI: "We welcome the RBIs decision to continue with their accommodative stance. We urge the Central Government to address the deteriorating health of MSMEs and various other sectors which have been severely impacted by the second wave of the pandemic and are still struggling to get back on track. The low interest rates have been a crucial factor in the revival of the demand in the real estate sector. The buyers are already coming back to the market and we feel that the upcoming festive season will be a lot better than the previous years."

Anuj Puri, Chairman - ANAROCK Property Consultants: Had it not been for the pandemic, the RBI could have taken a different stance for the benchmark rates today. However, the spectre of inflation in the country looms too large, prompting the RBI - as expected - to keep the repo rates unchanged at 4% and reverse repo rate at 3.35%. This is the seventh consecutive time that the RBI has maintained status quo, largely on account of the ongoing COVID-19 uncertainties.

On the upside, the RBI did confirm that economic activity is reviving with the ebbing of COVID-19 in most states across the country. Also, the real GDP forecast for the FY 2021-22 remains at 9.5% in the wake of the vaccination drive that is in full swing in India. All this is positive for the residential market, which has strong correlations to the overall state of the economy.

The unchanged repo rate regime works well for home loan borrowers as the floating retail loan rates, which is directly linked to external benchmark repo rates, have been at the lowest level in the last two decades. The continuation of this low interest rate regime supports the environment of affordability which has become the new hallmark of the housing market - during the pandemic, and even before.

Sandeep Runwal, Managing Director, Runwal Group & President-Elect, NAREDCO Maharashtra: "The RBI has declared the accommodative policy stance amid the fears of the expected third wave of the pandemic yet again. It is imperative that low mortgage rates would continue for at least some more time now or maybe until the end of the year. This will provide the required fuel for the growth of the economy along with the real estate industry with which several other allied sectors are linked. Apart from the low-interest rates, the consumers' realization of owning a home along with the stamp duty cut in the key markets were the growth drivers for the real estate sector in the past few quarters and the strong demand is expected to continue going ahead."

Nishant Deshmukh, Founder and Managing Director, Sugee Group: “The RBI’s decision to maintain an accommodative stance has invoked a sense of optimism. The Repo Rate and Reverse Repo Rate remains unchanged at 4% and 3.35% respectively. This will act as a huge catalyst to infuse sufficient liquidity in the economy. The sector is recovering from the disruptions caused by the Covid-19 pandemic and with this measure, it will bring about a drive in the market and tame the inflation in the system. Lower home loan rates will definitely be a boon to enhance homebuyers' buying sentiments and encourage fence sitters to purchase their dream homes. This move, along with the government’s ambitious proposal to boost affordable housing, will aid to bring about a strong momentum in the segment and reconcile the economy. We expect the banks to pass on the benefits of these rates to the homebuyers and improve the revival of the real estate sector.”

Kamal Khetan, Chairman and Managing Director, Sunteck Realty Ltd: “The Reserve Bank’s accommodative stance is ideal to sustain a broader economic recovery. While the optimism about a steady economic recovery is gladdening, we believe that the recovery may need some more room from a good monetary-fiscal policy combination. The real estate industry is making recovery across many markets. With home loans still remaining at bottom levels, we believe the buying activity will soon be accelerated by those who have not used this favourable scenario to their advantage yet.”

Vinay Kedia, Director, Prescon Group: "The RBI leaving the key rates unchanged was very much expected as the slow easing of localized lockdowns, slow pace of vaccinations and the looming threat of another wave continue to hinder economic revival. Although the low interest rates will provide a sustained growth for the real estate sector, the developer's focus on the completion of projects and overall economic recovery will be the key factors driving the real estate demand going forward. The homebuyers should take advantage of the current situation because there are chances that the prices might go upwards later on account of reducing supply and the pressure of increased costs of raw materials such as steel and cement.”

Himanshu Jain, VP - Sales, Marketing and CRM, Satellite Developers Pvt. Ltd: ‘’Repo rate cuts have been kept unchanged time and again by the RBI during the last few quarters to keep the economy of the country afloat amidst the pandemic. Maintaining an accommodative stance indicates the RBI will intervene to provide the right push and direction to growth whenever necessary. The current scenario offers excellent investment opportunities in the residential segment as affordability is at all-time high. We require support from the banks by providing adequate liquidity that will boost the real estate sector."

Cherag Ramakrishnan, Managing Director, CR Realty: "The RBI's approach to continue with a 'wait and watch' mode is on expected lines to enable the growth momentum that seems to have set in during the last 2 months. With the Covid uncertainty looming, this seems to be a prudent move to allow growth to firmly set it. This has allowed for all-time historic low home loan rates which have played a significant role in reviving the housing demand as compared to the pre-Covid era. The pent-up demand, the opening of economic activities, and continuous Government interventions have also helped in lifting the market sentiments. We feel that the demand for homes will now gain momentum going into the upcoming festive season”

Shraddha Kedia-Agarwal, Director, Transcon Developers: ''RBI maintaining status quo on key policy rates was expected given the inflationary concerns in recent months. The low-interest rates for the last few months have already given a boost to the real estate sector upticking the demand in the last few quarters and enhancing the confidence of the homebuyers. The decision will help to sustain liquidity for some period as we are already witnessing the derailment of economic momentum due to the Covid-19 pandemic and lockdowns in different parts of the country. It will also help in sustaining economic stability as well as keep the real estate sector stay afloat during these unprecedented times.''

Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory: "The RBI and especially the MPC are to be commended for maintaining an accommodative stance for the seventh consecutive time now. Their approach towards tackling the situation created by the pandemic and steps taken to help revive the economy will go down in history as being one of the finest. The reduction in stamp duty charges in some parts of the country along with the all-time low housing loan rates have given the much-required fillip to sales activity in the last few quarters. The expectation amongst stakeholders of the industry is that the banks should now further sweeten the lending rates, at least till such time that the economy gets back to the pre-COVID levels."

Bhushan Nemlekar, Director, Sumit Woods Limited: "On an expected line, the monetary policy committee (MPC) has kept the repo rate unchanged with an extended accommodative stance for the seventh consecutive time that will continue to serve the marketswell. The prevailing low home loan rates are already enticing for homebuyers. It's high time the banks need to pass on the benefits to the homebuyers. With the interest rates at a record low, the Government will continue taking affirmative measures as long as it is necessary to revive the economy and alleviate Covid-19 impact."

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