New Delhi: Hailing the Reserve Bank of India’s move to cut the repo rate at the time of festivals, realty developers and consultants said the central bank should impress upon lenders to pass on benefits of the rate reduction to customers by lowering interest on home loans for boosting housing demand.
The RBI earlier in the day reduced the repo rate by 0.25 per cent – the short-term rate at which the central bank lends to banks – to 6.25 per cent.
“We welcome the rate cut. However, it will benefit only when banks pass it on to home loan borrowers and other retail customers. That is not happening. This is very unfair. RBI must push banks to pass on the reduction in rate cut,” CREDAI president Getamber Anand told PTI.
Interest rate on home loans needs to be lowered to boost housing sales, he said.
When contacted, DLF CEO Rajeev Talwar said: “It’s a very good announcement by RBI. The new Governor and Monetary Policy Committee have taken a very progressive and a unanimous stand to promote further growth of the economy.”
Further growth of the economy will positively impact demand in the housing segment and the overall real estate sector, said Mr Talwar, who is also the chairman of NAREDCO.
The real estate sector is in the midst of a slowdown for last 3-4 years leading to significant delays in project completion.
NAREDCO president Parveen Jain said the rate cut would boost sentiment in the market and help revive housing sales.
“This is a pleasant surprise and will help further boost demand in the real estate sector, which is appropriately required ahead of the festive season. Boosting demand will help the real estate sector with growth and profitability,” JLL India chairman and country head Anuj Puri said.
He hoped that the banks will pass on the benefit of rate cut to the consumers.
Stating that the rate cut augurs well for the realty sector, Knight Frank India CMD Shishir Baijal said: “We do hope that the transmission of the rate cut is efficient and banks pass on the benefit to the customers in similar magnitude.”
Supertech chairman R K Arora hoped that sluggishness in the property sales would come to an end with this policy action at the festive season.
PropEquity founder Samir Jasuja saw it as a positive development as major home sales happen during the festive season. He expects banks to pass on the rate cut to home loan borrowers.
According to SARE Homes MD Vineet Relia, this would boost not only the realty sector but the overall economy ahead of the festive season. “It is imperative for banks to reduce interest rates,” Mr Relia added.
Gaurav Mittal of CHD Developers said the banks should pass on the benefits of this rate cut. “Lowering of the lending rates would be pivotal in generating demand,” Mr Mittal noted.
CREDAI (western UP) VP Amit Modi said: “We hope that both the Finance Ministry as well as RBI ask all the banks to transfer the benefits to the end consumer. Else, this move will severely stop short of benefiting the consumer and only help in buffering the bottom lines of the bank.”