Urges RBI to soften the interest rates and increase funding to the real estate sector
The Confederation of Real Estate Developers’ Associations of India (CREDAI) the apex body for private real estate developers in India expressed their concern over the RBI decision to increase the repo rates by 25 bps to 8% in the third-quarter monetary policy review. The step was unexpected as the industry was expecting RBI to give precedence to growth over inflation especially as prices are trending downwards; core inflation is within the comfort zone.
Speaking on the development Mr. C Shekar Reddy President CREDAI- National said, “The RBI’s decision to increase the repo rate by 25 bps is shocking as it was not expected and took the industry by surprise. The industry expected the RBI to maintain the status quo on rates as the index for industrial production was at the low of -2.1% for December. With inflation at a three-month low to 9.87% from record high of 11.16% and WPI inflation on a five month low at 6.16% from 7.52% in the previous month, this was the opportune time to take measures to propel industrial growth. “
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| C Shekar Reddy President CREDAI- National |
Mr. Reddy urged the RBI “To take proactive measure to reduce the lending rates and increase the share of funding to the real estate sector which is currently at a low of 2.7% to the Developers and 9% to the home buyers. This 12% funding to the sector is quite meagre and should be raised to 15% to the Developers for project funding and an overall of 24% which will be comparable to 32% in USA and 22% in China. The housing sector is poised to grow manifold in the next decade and a half and will require a capital investment of about $1.2 Trillion. RBI should liberalize the norms and also lower the interest rates so that this sector with the high multiplier effect can propel the economy to the double digit GDP growth and accelerated capital formation not only in this sector but also in all the 300 allied industries.”
About CREDAI: The Voice of India’s Real Estate Industry
The Confederation of Real Estate Developers’ Associations of India (CREDAI) is the apex body for private real estate developers in India. CREDAI represents over 9,000 developers through 142 cities and 22 state level member associations across the country. Its numerous initiatives and activities help developers come together and work towards better practices, improved customer service and a stronger realty industry.
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