Mumbai: Real estate players in Mumbai observed that the expected rate cut of 25 bps by RBI would have caused home loan values to fall below 8% for first time ever. They said the previous rate cuts are yet to play out completely and the industry is reeling under the liquidity crisis. They were reacting to the decision by Monetary Policy Committee (MPC) led by RBI Governor Shaktikanta Das to keep the policy repo rate unchanged at 5.15%.
National Real Estate Development Council president Niranjan Hiranandani said the rate cut was need of the hour to revive the slowing economy but RPI springs a shocker. ''The benefits from the previous rate cuts are yet to play out completely and the real estate industry is still reeling under the liquidity crisis. One time roll over to restructure bad loans would have been a logical step across the industries. Thus the decision to wait and watch the outplay of previous cuts will go against the current sentiments,'' he noted.
On the other hand, ANAROCK Property Consultants chairman Anuj Puri said the expected rate cut of 25 bps would have caused home loan values to fall below 8% for first time ever. However, he viewed that another rate cut alone would have been insufficient to stir housing sales significantly across budget categories. ''The previous rate cuts through 2019 had almost no perceptible impact on residential sales. In fact, back in 2014, even when the home loan rates were high in two digits at 10.3% housing sales remained at peak,'' he noted.
Puri suggested that in the present scenario only the combined effect of lower interest rates coupled with other measures such as a cut in personal taxes can actually stimulate residential slaes out of their current lethargy.
Further, Nahar Group vice chairperson Manju Yagnik pointed out that at this juncture responsive rate adjustment and policy streamlining will help in sustaining home buyers' interest especially in the broadest segment of affordable and ready to move in.