In Mumbai, real estate developers welcomed the Reserve Bank of India’s decision of reducing the 25 basis point repo rate, hoping that it would lead to less expensive home loans. However, the buyers feel that the developers also need to slash the highly inflated property rates to make housing affordable.
Paras Gundecha, president of MCHI-CREDAI said that the RBI’s move will help decrease the interest rate, boosting the slow down in real estate industry. It is a small, but good beginning. He hoped that RBI will come out with many more such steps. And, bankers will follow suit by cutting down the lending rates.
He added that it would boost liquidity in the real estate market, easing pressure on cash-strapped developers. Last year was particularly bad for the real estate sector. Due to liquidity crunch and costly EMIs, sales plummeted, said Gundecha, adding that the RBI should take some pragmatic decision to support the capital- and labour-intensive real estate sector.