New Delhi: Property developers and consultants on Wednesday expressed disappointment over the RBI decision to keep key policy rates unchanged and said the reduction in interest rates would have given a boost to sluggish housing sales.
They urged banks to pass on the benefits of previous rate cuts and hoped that the Reserve Bank would reduce key policy rates early next year. “Every industry, including real estate, will be disappointed. Now the pressure will be on the government to reduce tax rates to give some encouragement to the industry,” realtors’ body NAREDCO Chairman Rajeev Talwar told PTI.
Talwar, who is CEO of DLF Ltd, said this could be RBI’s strategy to force banks to pass on earlier rate cuts. CREDAI President Getamber Anand said: “Though it is unfortunate that the central bank left all policy rates unchanged today, we are still hopeful and understand that may be the policy makers are waiting till December 31 to see the final outcome of demonetisation post which an aggressive announcement on rate cuts will be made sooner than later.
“At this point in time the confidence of the Indian public needs a boost and we are sure that the government will certainly step in to ensure that India’s growth story is not disrupted in any manner whatsoever.”
Real estate consultant JLL India Chairman & Country Head Anuj Puri said: “For the realty sector, which is currently reeling under pressure from the demonetisation of high-value currency notes, a rate cut could have definitely allayed fears of a near-term loss of momentum.”
CBRE Chairman (India-South East Asia) Anshuman Magazine was surprised on the RBI’s decision to keep the repo rate unchanged at 6.25 per cent. “Lowering the repo rate would have provided a strong thrust to the real estate sector…The committee seems to be allowing some external factors to play out fully before embarking on further policy actions and has left enough room for a larger cumulative rate cut in its next monetary policy announcement expected early next year,” Magazine added.
Knight Frank India Chairman & Managing Director Shishir Baijal said: “A rate cut could have been encouraging at this moment. However, it is disappointing that RBI decided against it. We were expecting a 25 bps cut, which could have given an impetus to the beleaguered real estate sector.”
Cushman & Wakefield’s MD (India) said the RBI has kept the repo rate unchanged at a time when the market expected a 25-50 bps cut in light of the recent demonetisation. He asked Sare Homes MD Vineet Relia said there was a general sense of expectation that RBI would reduce key policy rates and that could have had a positive impact for the realty sector. Gera Developments MD Rohit Gera said it is disappointing that the RBI Governor has left the rates unchanged.
“Recent demonetisation move by the Government had led to substantial liquidity in the banking system. Further, this move has led to the need for a stimulus to the economy. The stimulus could have come by way of a rate cut by the RBI,” he added.