Key Interest Rates Unchanged : Realty Companies Unhappy over RBI

Indian real estate companies and associations and property consultants have expressed disappointment over Reserve of India's (RBI's) decision to keep interest rates unchanged and said the sector urgently needs cut in interest rates to boost housing demand.

Disappointment..!

Mr. Lalit Jain, President, CREDAI ( Confederation of Real Estate Developers' Associations of India) said, "There is once again disappointment from RBI. There was no change in the interest rates in previous policy announcement & the real estate industry was expecting a rate cut this time.  We do not see any positive policies from government which will boost the real estate sector & economy as well" .

The RBI recently (July 31, 2012) left key interest rates unchanged.

Mr. Anshuman Magazine, CMD, CBRE South Asia, said: "The RBI's decision to keep the interest rates unchanged is very disappointing. The real estate market direly needed a rate cut to boost investor sentiment. The real estate sector is the growth engine of India's economy, but it seems the sector does not figure in RBI's policies at all, Magazine".

Mr. Gaurav Mittal, MD, CHD Developers said, ''The growth of the Indian real estate sector would be fuelled only by a rate cut. We hope RBI will take cognisance of this fact & we will see a rate cut in the next policy"

Postponing purchase decision..!

Mr. Sanjay Dutt, Executive Managing Director (South Asia), Cushman & Wakefield said, "RBI maintaining status quo on policy front is not positive news for both house buyers & developers.For the housing sector, this may not be a very positive news as end users, who have been postponing their purchase decision on account of still high inflation and high interest rates, can not expect any relief in the near future. The outlook for Indian real estate sector remains cautious as persistent high inflation rates are keeping construction costs up, which are not expected to come down in the near future"

 Mr. Gaurav Jain, Head-Finance, M3M, said: "We expected some key interest rate cuts from the first quarter (June) review by RBI, however RBI kept the key rates unchanged.. We need to understand that the inflation today is not due to high demand. But supply constraints which lead to continuous increase in the input costs, including the cost of funds"

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