NEW DELHI: Realtors’ body NAREDCO has sought a 25-30 basis points reduction in repo rates in the upcoming monetary policy to boost housing demand. “While the realty sector is demonstrating robust growth and positive sentiment, a stable or marginally reduced repo rate will further strengthen its trajectory. A reduction of 25-30 basis points could signal a supportive stance by the RBI, not only energising the real estate market but also benefiting allied industries such as construction, cement, and steel,” NAREDCO President G Hari Babu said.
This would act as a psychological and financial boost for developers and homebuyers alike, encouraging investments and making home loans more affordable, he added.
“The affordable housing segment, particularly in tier-2 and 3 cities, stands to gain immensely, aligning with the government’s vision of inclusive growth and urban development,” Hari Babu said.
The rate cut would enhance liquidity, enabling developers to expedite ongoing projects and plan new ventures.
“Overall, a reduction in repo rate would serve as a catalyst for the sector, amplifying its contribution to the economy and fostering sustainable growth across regions,” Hari Babu said.
Knight Frank CMD Shishir Baijal said a rate cut will be beneficial for the real estate sector as it will make borrowings more affordable for home buyers and reinstate consumer sentiment particularly in the lower and mid income segments.
“It will also potentially enhance liquidity in the banking system, making it easier for developers to access financing for their projects,” he added.
Anantharam Varayur, Co-Founder of Manasum senior living, expected the Reserve Bank of India (RBI) to maintain or reduce key interest rates during its monetary policy announcements.
Angad Bedi, CMD of construction firm BCD group, said, “The RBI’s MPC should ideally complement the efforts of the finance minister in driving consumption-led growth by lowering interest rates and bringing cheers to the end consumers.”
The real estate sector has been witnessing impressive demand for premium and luxury properties but with the exception of affordable housing which will greatly benefit from a rate cut, he added.
Ankur Jalan, CEO of AIF Golden Growth Fund (GGF), said, “With economic growth dipping, we believe it is the ideal time for the Reserve Bank of India (RBI) to cut interest rates. This, along with the recent budget announcement on income tax exemptions up to Rs 12 lakh, will together play a vital role in stimulating consumption and driving up the economic activity across all sectors including real estate.”
On February 5, the RBI started deliberations on the monetary policy amid expectations of a 25 basis-points rate cut as inflation remains within the central bank’s comfort zone, though the sliding rupee continues to be a concern.
