Real Estate happy after Repo rate cut

Real Estate happy after Repo rate cut

Agency News

New Delhi, Jun 6: Real Estate showed happiness on the Monetary Policy Committee (MPC)’s decision to cut interest rates by 25 basis points to 5.75 per cent from 6 per cent for the third time in a row.
Eros Group Director Avneesh Sood said the reduction of repo rate by 0.25 per cent by the Reserve Bank of India is encouraging for the real estate sector. RBI was expected to reduce the rate since it will help renew the investment cycle by resolving the issue of significant shortage of liquidity in the real estate market and bringing-in more buyers. This would further induce better cash-flow for the real estate players to complete projects and pay off debts.
The reduction is promising and will go a long way in improving home buyer sentiments and adds momentum to the industry's revival thereby positively impacting their purchase decisions. In fact, combined with the newly elected stable government, this move will also further propel government’s affordable housing initiative, he added.
CBRE India chairman and CEO Anshuman Magazine said the decision was expected on lines given the backdrop of low inflation and rising growth concerns in the economy. The rate cut coupled with the budget stimulus for the economy, and the real estate sector in particular, will impact consumer sentiments positively.
Piramal Capital and Housing Finance MD Khushru Jijina said the downward revision of growth projection by the RBI from 7.2 per cent to 7 per cent in 2019-20 calls for the implementation of additional rapid policy interventions by both RBI as well as the Government.
NBFCs are instrumental in providing credit to MSMEs and real estate sectors, that are significant to India’s GDP. MSMEs contribute 31 per cent of the GDP, 40 per cent of exports and hires 25 per cent of the labour force while real estate contributes more than 5 per cent to GDP and hires 17 per cent of the labour force directly or indirectly.

He said the credit crunch in the NBFC sector has witnessed a corresponding decline in manufacturing and construction activities in the last two quarters of 2018-19. We anticipate more decisive and pro-active policy measures to address the current liquidity crisis that will enable NBFCs to restore lending activities, especially to these critical sectors.

Sarvatra Technologies Founder and Vice President Mandar Agashe said ''With the waiver of charges on payment modes like RTGS and NEFT, RBI is clearly nudging the banks towards increasing digital payments. This move will specially benefit the small traders who deal in small value transactions and operates on small margins and for whom every penny counts. So this is actually a great move for the masses and will go a long way in encouraging digitization of payments and enhancing financial inclusion.''

Personal loan app CASHe Chairman and Founder Raman Kumar said, ''The interest rates are amongst the highest in the emerging economies. The reduction in repo rate by 25 bps will directly bring down the rate of EMI which means consumers can now avail home, auto and other loans at much cheaper rates. This will encourage lending and credit thereby boosting the overall economic growth.
This will also revitalize consumption, enhance demand and exports besides resolving the ongoing liquidity issues in the financial sector, he said.

The digital lending and borrowing marketplace for instant personal loans 'IndiaLends' Founder & CEO Gaurav Chopra said ''RBI’s decision to reduce repo rate by 25 basis points to 5.75 per cent, augurs well with the retail lending sector. Amidst global uncertainty, subdued domestic industrial activity & CPI within RBI’s comfort zone of 4 per cent within a band of plus or minus 2 per cent, this anticipated reduction is a welcome move.''
This rate cut will cause a rise in the overall investment demand and improve credit environment of the economy, he said, adding that the reduction will give an extra room for the retail loans to become cheaper as this will cause the current cost for lenders to go down along with a possible chance of tenure reduction for old customers. (UNI)