Real estate builders expressed their discontent over the RBI’s decision to keep key policy rate unchanged. RBI seems not worried and unaffected as the central bank said expressed this as the right time to do so.
The Central bank of India said that it was the right time to lower the borrowing cost for real estate developers as well as home buyers.
Real estate apex body CREDAI has strongly expressed their disappointment over the RBI decision. CREDAI President Lalit Kumar Jain condemned the decision as entirely negative approach towards real estate.
Mr. Jain pointing to the difficulties in raising high level funds for real estate constructions requested the central bank to have a softer policy. He further added of the necessity of reduction in interest rate.
Real estate industry being the 2nd largest employer in the country, contributes a large amount to the GDP. Moreover 400 other industries depend on real estate for their development.
Real estate CREDAI’s recent meeting with the Finance Ministry officials however shed some rays of hope. Mr. Jain expressed his hope in the government which will try to come out with some “pragmatic policy.” He added that the real estate developers are hopeful of this sort of favoring policies.
Real estate consultancy firm CBRE too expressed a very similar view. CBRE South Asia Chairman and Managing Director Anshuman Magazine opined that the decision of RBI to maintain unchanged key- policy- rates once again is a setback to the real estate sector. He too expressed his disappointment.
Mr. Magazine further highlighted that cut short of the repo rate should have attracted more investors. He opined that the cut of 25 base points in the CRR rate also invites some sort of liquidity.
In short the RBI’s decision to keep the rate will adversely affect the real estate builders. The inaugural funding will be a great trouble for the real estate builders. However the real estate developers expect some sort of help from the government which is expected to bring some policies in favor of the real estate builders.