Reactions of Realty Majors on RBI rate Cut

New Delhi, June 07, 2019: 

Manoj Gaur, MD, GAURS GROUP and Chairman of Affordable Housing Committee, CREDAI (National)

The benchmark lending rate cut by 25 bps to 5.75 percent is a positive move for real estate sector before the union budget for FY 19-20. This move will surely benefit banks which eventually can ease Lending in the real estate sector. The third consecutive reduction shows positive signs which can surely enhance the demand for housing, marginally.

Though the past cut wasn’t passed on to the consumers so we would have to wait and watch whether this time the consumers get the benefits or not.

Amit Modi, Director- ABA Corp, President (Elect) CREDAI (Western UP)

Despite the cut in policy rates third time in a row this year, banks have not passed on the benefits to the consumers on ground, even though the move showcases the RBI’s softer stand towards lending, but all it ends up doing is cushioning the bottom lines of the banks which is counter productive. Hence, we hope that with this development, the banks will immediately pass on the cut to the home buyers, since that’s the confidence booster for the real estate buyer, and will finally lead to much needed investment spur in the sector, which will not only culminate in more launches in real estate sector, but more importantly timely project completions as well.

Pradeep Aggarwal, Co-Founder & Chairman, Signature Global and Chairman, National Council on Affordable Housing, ASSOCHAM

The RBI policy rate cut will not only be a positive outcome for the sector, but also for the eligible new home borrowers who can take advantage of the subsidies scheme under PMAY. This move will be a big boost for affordable housing segment and help for first time home buyers. The rate cut brings fetches confidence for the market as this will make availability of more money at the banks thereby lowering the EMI burdens.

Anupam Gupta, Director – Sales & Marketing, GBP Group

Three consecutive repo rate cuts this year is not only a positive outcome for the real estate sector but also for the eligible new home borrowers who can take advantage of the subsidies scheme under PMAY (Pradhan Mantri Awas Yojana). More money available in banks at a lower cost will result in increased purchasing power as there will be a lower EMI burden on the buyers. It will also lighten the liquidity crunch and lower the cost of finance for the developers.

Ashish Bhutani, CEO, Bhutani Infra

It is a good move by the RBI  to cut repo rate and it is commendable that it is doing its part to accelerate the economy. However, the banks have not yet passed on the benefits to the consumers, which is not benefitting the real estate sector that in turn is affecting the allied industries too. For example, cement industry is one of the eight core industries that have decelerated sharply as it was noted in the RBI’s second bi-monthly monetary policy review of the ongoing fiscal. In the commercial sector, the coming up of REITs has to be backed by favourable bank rates to the buyers and if it is not happening now, even after the third cut this year, the situation might not look very promising. RBI should take action so that banks pass on the benefits to the buyers. Liquidity crisis has to be tackled soon as situation after NBFC crisis is dismal; this cannot happen until and unless banks take a firm decision to back the sector that has many allied industries attached to it.

Mani Rangarajan, Group COO, Housing.com/Makaan.com/PropTiger.com

The third consecutive repo rate cut from the RBI is in lines with the expectations. We hope that the reduction is passed on by the banks to the home buyers. Lower interest rates, along with the recent reduction in GST rates for under construction properties, should provide the fillip to end-user demand.

Deepak Kapoor, Director, Gulshan Homz & Former, President, CREDAI Western UP

With RBI reducing the repo rate back to back this financial year, shows a softer stand towards lending. I am sure Bank’s would surely reduce the lending rates, though marginally, which can boost the sentiments in the market. Also with the push which the government showed towards affordable segment in the budget 2019 where the income tax rebate was extended to Rs 5 lakh, I am sure end users would now be more motivated, to purchase their homes, post the repo rate cut.

Vaibhav Jain, CMD, Rise Group

The 25 basis point cut in policy rates is on the expected lines. With inflation remaining as per the RBI target and GDP growth falling to below 6% during Q4, a rate cut was on the cards. The fact that the apex bank has changed its stance from neutral to accommodative is a welcome step. We are hopeful that the third successive rate cut will provide much needed impetus to the economy and real estate sector in particular provided commercial banks pass on the benefits to end users.

Uddhav  Poddar, Director  & CEO Bhumika Group

Reduction of the repo rate by RBI is a welcome move. It would boost the sentiments in the real estate market. This along with the rebates offered by the government towards affordable housing segment in the budget 2019, we expect end users would be motivated to invest in real estate, especially post this repo rate cut.

Rajat Goel, Joint Managing Director, MRG World

The third successive cut in the policy rates is a welcome step. This should benefit the economy as a whole as well as the real estate industry, which is one of the biggest employment generator in the country. The whole financial system, particularly the NBFC sector is facing some stress. In the absence of bank financing, it is the NBFCs which have accounted for large share of funding to the realty sector. It would have been apt for the apex bank to announce some measures to reduce the stress on NBFCs, which is vital for the revival of the economy.

Kaushal Jain, MD, Arihant Group

The repo rate cut by RBI will aspire the real estate sector to pick up their businesses in the market. It will be a constructive progression for the sector and is counted on with the RBI policy rate cut by 25 bps. This step is highly expected to rejuvenate the real estate market as it will give assistance in taking down the marginal cost of fund based lending rates (MCLR) thereby bringing in more availability of money at the banks.

Harinder Singh Hora, Managing Director, Reach Group

The real estate segment is expected to pick up with RBI monetary policy’s rate cut. The repo rate cut of 25 bases points will not only benefit the developers but will also favour the homebuyers. More money available in banks at a lower cost will result in increased purchasing power as there will be a lower EMI burden on the buyers. It will also lighten the liquidity crunch and lower the cost of finance for the developers. Such a positive announcement by the RBI was much needed for the realty sector to take off.

Amit Raheja, CMD, Wealth Clinic

This is really good news especially for home loan borrowers with the RBI bringing down the key policy rate by 25 bps in its monetary policy review, signalling lower interest rates. With lower repo rates banks would be able to set the direction and reduce the level of interest rates, which eventually witness the increase of demand for homes in real estate sector. The year has been good so far with lot of policy measures being taken by the authorities that will help the sector improve its standing.

Vikas Bhasin, CMD, Saya Group

This is surprisingly a good development — three back to back repo rate cuts this year — and indeed a step in the right direction. It will help to ease the pressure off the market by attracting more number of buyers to invest in the real estate sector. We also hope that with this announcement, the banks will immediately pass on the cut to the home buyers which will definitely boost the confidence of the customers.

Dhiraj Jain, Director, Mahagun Group

This is good news especially for home loan borrowers with the RBI bringing down the key policy rate for the 3rd time by 25 bps in its monetary policy review, signalling lower interest rates. With lower repo rates banks would be able to set the direction and reduce the level of interest rates, which will eventually witness the increase in demand for homes in real estate sector. The year has been good so far with lot of policy measures being taken by the authorities that will help the sector improve its standing.

Rajesh Goyal, MD RG Group and VP CREDAI NCR

The third consecutive rate cut of 25 basis points by RBI is a good development, since easing interest rate will help revive health of businesses like Real-Estate which are highly sensitive to interest rate movements, but while it is indeed a step in the right direction, there is definitely more requirement to improve the sentiment towards investments in the country. The back to back repo rate cuts will boost affordable and mid segment housing sales.

Pankaj Jain, Managing Director, Realistic Realtors

We welcome the RBI’s decision to cut repo rate by 25 basis points to 5.75%. It is indeed a positive step to revive the demand in the real estate sector. It will allow the banks to pass the rate cut benefits on home and other loans to the customers. The step will increase lending as the EMIs will become cheaper and the real estate developers can witness steady growth in the sales of homes across different segments in the coming quarter.

Prateek Mittal, Executive Director, Sushma Group

The back to back rate cut of 25 basis points in this calendar year by  RBI in its monetary policy shows a softer side towards lending. It would for sure provide relief to the borrowers and will provide a boost to the real estate segment. With lower repo rates banks would be able to set the direction and reduce the level of interest rates, which eventually will witness the increase of demand for homes in real estate sector. The reduction in repo rate will help the borrowers of big-ticket loans like home loans which will certainly lead to the increased demand for homes.

LC Mittal, Director, Motia Group

The Repo rate cut for 3rd time in a row in this year aims to provide greater relief to the real estate sector. The reduction by 25 basis points will ease the pressure off the market and accelerate the investment cycle. Post implementation of GST & RERA real estate sector is on the revival path and decreased repo rate will be additional support for the buyers.

Ashok Gupta, CMD, Ajnara India Limited

As Expected, RBI cuts rates by 25 bps, and keeping the stance neutral. The third consecutive rate cut would provide relief to the borrowers and will provide a boost to the real estate segment.  It will also accentuate the recent softness in momentum in the domestic economy.  Now it is the responsibility of Banks to pass on the benefits to home buyers.

Sagar Saxena, Project Head, Spectrum Metro

The 25 basis point policy rate cut is anticipated to rejuvenate the real estate market as this step will give assistance in lowering the marginal cost of fund based lending rates (MCLR) thereby bringing in more availability of money at the banks. The RBI Policy rate cut will not only benefit the developers, but also will favour the homebuyers by lowering the EMI burden.

Harvinder Singh Sikka, MD, Sikka Group

The 25bps cut is in line with our expectation which will aid the RBI to boost the liquidity in the system. Developers are working hard to bring real estate back on track and Government is also supporting us in every possible way. This move will prove beneficial from a consumption and lending perspective, thereby boosting economic growth.

Dhiraj Bora, General Manager, Corporate Communication, Paramount Group

This is a good development, since easing interest rate will help revive health of businesses like Real-Estate which are highly sensitive to interest rate movements, but while it is indeed a step in the right direction, there is definitely more required to improve the sentiment towards investments in the country. The back to back repo rate cuts will boost the affordable and mid segment housing sales.

Kushagr Ansal, Director Ansal Housing & President CFREDAI Haryana

A constructive progression for the real estate sector is counted on with the RBI policy rate cut by 25 basis points. This is surely going to boost the market as this is the third time in FY 2018-19 that the rates have been cut by 25 bps changing the reserve repo rate at 5.75%. The marginal cost of fund based lending rates is expected to be low which in turn infers the availability of more money the banks thereby benefiting both the end-users and the developers.

Corporate Comm India(CCI Newswire)