Realty industry hails RBI Governor’s announcement
MUMBAI, Oct 8 (The CONNECT) - The real estate industry has welcomed RBI’s decision to keep the repo-rate unchanged at 4%, facilitating the continuation of the low-rate-of-interest regime which in turn would help buyers to go for housing loans.
Repo rate is the rate at which banks borrow money from RBI by selling their securities. RBI changes the rate keeping an eye on the inflation. The repo rate which was at 6.25% in February 2019, has been gradually brought down to 4% in May 2020 and remained unchanged since then. This helped the banks to cut rates of interest on housing loans which are hovering around 6.5% now - the lowest.
Anuj Puri, Chairman - ANAROCK Group, said as expected, RBI maintained the monetary policy pause, keeping the repo rate unchanged at 4% and reverse repo rate at 3.35%. In short for homebuyers, the low home loan interest rates regime will continue in the market and help foster housing demand during the ongoing festive season. Notably, this is a period when housing sales usually surge on the back of attractive offers by developers and lending banks.
The green shoots of economic revival coupled with the prevailing low interest rates will be conducive for the residential sector in the short to mid-term.
“ANAROCK Research indicates that we may see at least 10-15% growth in housing demand in the ongoing festive period (Oct.-Dec) across the top 7 cities against the preceding quarter. In Q3 2021, the top 7 cities saw total housing sales of nearly 62,800 units – already the best quarterly sales since the pandemic,” Puri said.
If ANAROCK's predictions are accurate, the ongoing festive quarter will see at least a 35-40% yearly rise in overall housing sales across the top 7 cities as against the same period in 2020. In Q4 2020, the top 7 cities saw total housing sales of nearly 50,900 units, he added.
Rajan Bandelkar, President, NAREDCO India described the RBI policy as a "very bold and appreciable move". By not toeing the line of its global peers, by tightening the ease of liquidity, the RBI has shown that it is determined to help India sail through the recovery phase and help move towards high growth rate, he said.
The move could not have come at a better time and this decision of the RBI’s Monetary Policy Committee is the perfect festive gift for the Indian citizen who wants to have a home of their own. With interest rates already at unprecedented low levels, now it is a great opportunity for the fence-sitting prospective home buyers to fulfill their dream, during the upcoming festive season, Bandelkar added.
Ashok Mohanani, President - NAREDCO Maharashtra, said "The economic growth needs to be supported through monetary policy and this is the foremost reason that the RBI has continued its accommodative stance. We have seen a revival in real estate and related sectors because of the rising vaccination numbers. Also, the interest rates will continue to be at a record low for some time. Therefore, this is the best time to buy a home as it gives the aspiring homebuyers a lifetime opportunity to purchase their dream home with various festive offers as well as all-time low interest rates."
''RBI maintaining status quo on key policy rates was expected to maintain the financial stability before the festive season. The all-time low interest rates 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,” said Shraddha Kedia-Agarwal, Director, Transcon Developers.
This has also helped the sector to regain its strength as well as stay afloat during these unprecedented times. The Government's favourable policy measures along with festive deals will help sustain the demand during the festive season, she said.
Himanshu Jain, VP - Sales, Marketing and CRM, Satellite Developers Pvt. Ltd., said “repo rate cuts have been kept unchanged by the RBI to sustain the financial stability and boost demand during the ongoing festive season. The current scenario offers excellent investment opportunities in the residential segment as affordability is at all-time high. With the banks and financial institutions further slashing the interest rates, it will provide a much-needed fillip to the real estate sales in the festive season."
Vinay Kedia - Director, Prescon Group, said the RBI and the government have been implementing a number of measures to help the real estate sector. Although the low interest rates will provide sustained growth for the real estate sector, developer's focus on project completion and delivery will be the key factors driving the real estate demand going forward. “Homebuyers should take advantage of the current scenario as many major banks and housing finance organisations are offering low-interest home loans owing to the festive season ahead,” Kedia said.
Pritam Chivukula, Co-Founder & Director, Tridhaatu Realty and Hon. Secretary, CREDAI MCHI welcomed the RBIs decision to continue with their accommodative stance ahead of the festive season.
He opined that the rising vaccinations should lead to opening up of the contact-intensive services sector which were hit hard by the virus. The low interest rates have been a crucial factor in the revival of the demand in the real estate sector. Also, the reduction in home loan interest rates by leading banks for a limited period have extended the best buying opportunity for the homebuyers. 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. “For the next few days, the buyers can swoop in on good deals on the back of rock-bottom interest rates on home loans along with festive offers from good developers on the eve of expected price rise," he said.
Bhushan Nemlekar, Director, Sumit Woods Limited, too said the RBI policy was on expected lines.The prevailing low home loan rates are already enticing for homebuyers which has immensely benefited the real estate sector. The record low interest together with the festive deals will encourage the consumers to proceed with their purchase and quickly close their transactions, he added.
Sandeep Runwal - Managing Director, Runwal Group and President-Elect, NAREDCO Maharashtra hailed RBI for its proactive stance to ensure liquidity since Covid. “It is imperative that low mortgage rates would continue for at least some more time now or maybe until the end of the year,” he said.
The end-user interest has increased mostly due to the all-time low home loan interest rate regime which has provided 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 key policy measures have been the growth drivers for the real estate sector in the past few quarters and the strong demand is expected to continue in the festive season as well, Runwal added.
Cherag Ramakrishnan, Managing Director, CR Realty, said "This approach (by RBI) is extremely productive and industry friendly. Specially the interest rate sensitive sectors like Realty will benefit immensely from not only all-time low interest rates but also high levels of liquidity that the Central bank has allowed the banks to maintain."
According to 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 eight consecutive time now. Their approach towards tackling the economy amidst the pandemic has been one of the finest. The various policy reforms along with the all-time low housing loan rates have given the much-required fillip to sales activity in the last few quarters. The all-time low rates regime in the festive season will boost the housing demand and help the economy to get back to the pre-COVID levels."
Sanjeev Chandiramani, Chief Operating Officer, Ruparel Realty, said the RBI has once again demonstrated its support towards businesses that drive economic growth of the country. These measures will enhance homebuyer’s confidence, which will aid in the industry's revival. Lower home loan rates will inspire people to pursue their goals of owning a home and will keep them motivated even in these challenging times.
Now is the moment to realize the sector's true potential by addressing some of the pending requests, such as single-window clearance, which will simplify the regulatory structure, he said and remarked: "we would like the government to assist the sector by addressing requests for industry status, the need for Input Tax Credit, and a Stamp Duty reduction which would help in gaining high momentum while putting the real estate sector on a high paced growth trajectory.”