In line with market expectations, the Reserve Bank of India recently kept the key interest rate unchanged at 7.25% at its third bi-monthly review of monetary policy. What effect will it leave on middle class who are looking to buy homes? Collegedekho.com talked to the experts of real estate and presents their opinion on the unchanged repo rate.
Manoj Gaur, MD, Gaursons India Ltd.: “We expected that the RBI would cut rate by at least even 25 basis points which would have been good for the real estate sector. We are still hopeful that RBI will come up with some policy change in coming months so that people should get their dream home. The decision was taken by RBI in the backdrop of high Consumer Price Inflation (CPI) but we believe that as the CPI eases in the coming months the RBI will cut rates to give boost to the sector.”
Prashant Tiwari, Chairman, Prateek Group: “It was a setback for the real estate sector as we require larger cut in the repo rate. The repo rate cut would have reduced the cost of funds to home buyers as well as developers as it would have allowed the banks to lower the interest rates. We now hope that government and RBI will come up with some solutions that will help the people buy homes.”
Sanjay Rastogi, Director, Saviour Builders Pvt. Ltd.: “It is not good news for the sector. We expect that RBI will also work towards housing for all of the government and come up with rate cuts that will be in line with the government’s oft-quoted policy. The repo rate cut is especially helpful for projects falling under affordable segment. Home loan interest affects middle class segment people as they are the ones depending on it. However, I would say that interest rate cuts are needed if we want to see people realizing their dreams of buying homes for self-use.”
Gaurav Gupta, General Secretary, CREDAI RNE: “Reduction in repo rates would have been a welcome step as currently economy needs a booster to come out of sluggishness. Inflation numbers are also comfortable and monsoon is also good. However we look forward for the reduction in rates in next review, as the festive season round the corner, there is a tendency for buyers to purchase property during this time”.
Owais Usmani, MD, Presidency Infraheights Pvt. Ltd.: “It is a positive move as it indicates that interest rates will not go upward. We hope the era of interest rate hikes has ended, Confederation of Real Estate Developers. In line with market expectation, RBI has kept repo rates untouched thus allowing buyers to execute their plan of investing in property. Now they are sure that since rates will be constant, the EMIs will not increase either”.
Anil Kumar Tulsiani, CMD, Tulsiani Developers and Construction Ltd: “We expected a cut because the sector is going through a low phase, sales volumes are low. By reducing the interest the RBI could have given a required boost to the sector. The next quarter is the festival period where sales volume are better, we would request the RBI to consider our request for cut of repo rate in next review so that the sector has an opportunity to recover in the festival period”.