RBIs Monetary Policy draws mixed

reaction from Realty Sector

Modis dream of Housing for All by
2022 seems to have caught the
fancies of the entire nation. Be it
the government, banks or real
estate developerseverybody is
trying their best to turn this
ambitious dream into reality. !n
one hand, in the "nion Budget
20#$, the %Mannounced several
incentives for a&ordable housing'
on the other hand, by increasing
the limit for a&ordable housing for
home loans, (B) came up *ith another bonan+a ,ust a *eek after the budget.
%urther, (B) also accorded infrastructure status to a&ordable housing
pro,ects. -hats not all. )n line *ith this cherished dream, realty giants are
launching a&ordable pro,ects in various cities.
"ndoubtedly, all these measures together have infused positive sentiments
in the market. Amidst this, in its third bi/monthly monetary policy revie*,
the (eserve Bank of )ndia 0(B)1 kept the repo rates unchanged at 2 per cent.
-hough a small cut in the interest rates *ould have been really appreciated,
the decision ho*ever has received mi3ed responses from the real estate
fraternity.
4-he (B)s decision to keep the rates unchanged is pretty much in line *ith
the market e3pectations as the central bank plans to tackle in5ation *hich is
slightly on the higher side. -he administration is looking to bring do*n the
in5ation rate to 26 by ne3t year and shall act as necessary to bring about
sustained disin5ation over a period of time. !verall the third Bi monthly
policy revie* is aimed at bringing about long term prosperity and reviving
the )ndian economy,7 says Abhay 8umar, 9M:, ;riha <ravesh Buildteck <vt
=td.
>imilar vie*s *ere echoed by < >ahel, ?ice 9hairman, =otus ;reens
:evelopers <vt. =td. He says, 4!ver the last t*o months, )ndias
macro/economic indicators have sho*ed signs of improvement, signaling the
march of economic recovery. Against this backdrop *hen things have started
moving in the right direction, the (B)s stance to keep key policy rates
unchanged should basically be seen as a hedge to check against any
backsliding should there be a spike in in5ation due to a de@cient monsoon
and food price volatility.7
-hough being looked as a measure to tame in5ation, several developers are
of the opinion that a small cut *ould have helped increasing the sales
volume signi@cantly. 4A cut of 2A bps *ould have actually infused some fund
and *ould have resulted in sentiments boost. -his *ould have encouraged
sales as *ell for real estate sector in particular,7 believes Aman Agar*al,
:irector, 8? :evelopers.
8eeping the repo rates unchanged actually mean no immediate relief for
home buyers in the form of cheaper loans. 49urrently, the ;overnments
focus is on infrastructure development, *hich through boosting supply and in
turn that *ill help to bring in5ation do*n. As in5ation and rates fall,
homeo*ners *ill bene@t from lo*er BM)s and also appreciation in the capital
value of their homes,7 informs :avid Calker, B3ecutive :irector of >A(B
Homes.
All said and done, realty stal*arts are no* looking for*ard to the ne3t (B)
monetary revie*. -hey are optimistic that in the ne3t revie*, (B) *ould come
out *ith some positive notes to boost the economy as a *hole.
4Although the real estate sector *ould love to see interest rates cut so as to
allo* for lo*er cost of borro*ing and repayment on home loans, ) think the
*ait *ont stretch too long before the central bank deems it @t and proper to
bring do*n rates. -ill then the industry has to build on the momentum
provided by the positive announcements in the budget last month,7 adds
>ahel.
Cell, *hat *ill happen in ne3t monetary revie*, only the time *ill tell.
Ho*ever, lets hope for the best.
SourceD 9ommon%loor.com
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