New Delhi: Hailing the Reserve Bank's decision to cut interest rate by 0.50 percent, real estate developers on Tuesday asked the banks to pass on the benefits to home loan borrowers that would help revive housing demand especially during upcoming festive season.
"It is a very welcoming announcement which RBI Governor has made, 50 basis points was long overdue. Not only realty but all manufacturing industry and all businesses in general are more than encouraged by this announcement," realtors' apex body CREDAI's National President Getamber Anand said.
"Our appeal to all banks is to pass on this rate cut to home buyers who avail home loans because that is what RBI governor has been saying that all the rate cuts that have happened have not translated into the reduction of home loan rates. This is now imperative and it must be done to benefit the end user," he added.
Commenting on the rate cut, India's largest realty firm DLF's CEO Rajeev Talwar said: "Very good announcement by RBI. Have left the job to the Finance Ministry to now convince the banks to lower their base rate."
Stating that the RBI has reduced the key interest rate by 125 basis points in last nine months while banks have so far cut rates only by 40 basis points, Talwar said "banks should pass on the benefits to the home borrowers which will mean very good for the real estate industry which has large unsold inventories".
He also asked developers to give some incentives to the buyers during festive season to sell these unsold stocks.
Property consultant CBRE South Asia Chairman & MD Anshuman Magazine said the rate cut would provide the necessary support to the economy as well as the real estate sector.
"The RBI's proposal to reduce the minimum risk weightage on individual housing loans for low cost homes will also help revive sales," he added.
Tata Housing CEO and MD Brotin Banerjee said with festive season around the corner, this was the "perfect time" for the RBI Governor to announce the rate cut of this magnitude.
However, he said that it was important that the banks translate the rate cuts into lower lending rates so that consumers could leverage the benefits of this announcement.
JLL India Chairman & Country Head Anuj Puri said: "As opposed to the market's expectation of a 25 basis points cut, the RBI has delivered an astounding 50 basis points reduction. With this, it has clearly abandoned its cautious baby-steps approach and assumed a bolder stance".
Welcoming the repo rate cut ahead of festivals, Omaxe CEO Mohit Goel said, "It's high time banks reduced interest rates and also increased lending in the housing segment".
Sare Homes MD Vineet Relia said this move would have positive impact on buyer and developer sentiment.
"Real estate is a rate-sensitive sector and the lowering of the repo rate is likely to open up the market for easier housing finance options. We are hopeful financial institutions would follow suit and pass on the benefits immediately to the customer," Relia added.
