Recently Reserve Bank of India has cut its rates by 0.25 per cent. However this has not satisfied the realty developers, who say that the rate cut is insufficient to boost home sales.
Reserve Bank of India has recently cut its rates by 0.25 per cent. Though the realty developers welcomed the RBI move, they added that the cut is insufficient to boost home sales.
In the opinion of realty developers, the sector is not going to gain any benefit from this as this is too small. The real estate sector is undergoing a sluggish momentum. The home sales across the country are down.
This has affected majority of the realty developers. They are finding it really tough to pay off their loans.
The realty developers say that the home sales can be improved only by revising the rate cuts. However the rate cut may not soon reduce the interest rates for home loans.
Commenting on the RBI decision to cut rates, Lalit Kumar Jain of CREDAI said that this will improve the sentiments of home buyers. He added, however, that this will have only a menial boost as the rate cut is minimal.
Any further reduction in the rates will benefit both the buyers and the realty developers. While the buyers will be able to purchase homes at lower interest rates, the builders have various loans with banks and other financial institutions.
At present, after the reduction, the repo rate is 7.25 per cent. If the rates are further lowered, then there would be more takers. This is what the realty developers seek for.
An official of DLF Group said that the rate cut will hardly boost the sector. In the opinion of the largest realty developers, the reduction rate is too small. DLF Group Executive Director Rajeev Talwar said that more reduction is needed for boosting the sector.