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Realtors hail rate cut, seek one-time loan restructuring
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SME Times News Bureau | 22 May, 2020
Real estate developers lauded Reserve Bank of India's 40 basis point
repo rate cut and said that it would help boost demand for homes as the
economy goes through a tough time amid the coronavirus pandemic.
Sector
players, however, said the rate cut should be transmitted by the banks
to the retail borrowers fast enough so that home buyers can avail of the
benefit and demand for apartments grows. They also pressed for the need
for one-time restructuring of loans taken by developers.
Noting
that the sector expected more stringent measures from the RBI to revive
the economy, Satish Magar, President, CREDAI National said: "The
interest rate should be reduced with firm liquidity measures as this is
the need of the hour, backed by one-time restructuring of loans to help
the real estate sector from crumpling."
He said the government now needs to ensure that banks are forthcoming in passing on the benefits.
Dhruv
Agarwala, Group CEO of Housing.com, the rate cut will not only help
developers but also the homebuyers who have been under extreme pressure
due to the prolonged lockdown which has impacted their income.
"This
along with the move of extending loan moratorium for another three
months will be extremely helpful in lowering the burden for those who
are paying EMIs or using credit cards and lower financial stress. What
needs to be seen is how quickly the banks reflect this change in their
respective rates," Agarwala said.
Manju Yagnik, Vice Chairperson
of Nahar Group, observed that the reduction in repo rate will encourage
prospective homebuyers to move ahead with their plans of investing in a
home, thus help in boosting the demand. It will also enable reviving
growth in the long-term.
She, said that although RBI has
estimated that GDP growth will be negative for FY 2020-21, the fact that
monetary policy transmission is improving coupled with the expectation
of normal monsoon which will spur economic activities.
Shishir
Baijal, Chairman & Managing Director, Knight Frank India, was of the
view that it would have been a big respite if the long-standing real
estate industry demand for a one-time restructuring of loans had been
allowed along with the measures announced on Friday.
He said
while the RBI has taken steps to boost liquidity, one of the real
challenges remains boosting the demand which may be addressed in
subsequent announcements.
According to Anuj Puri, Chairman of
Anarock Property Consultants, the rate cuts combined with the further
extension of loan moratoriums by 3 months up to August 31, 2020 augurs
well for the real estate sector in the times to come.
"Beyond
doubt, repo rate cuts do uplift the sentiments of home buyers even
further. Home loan interest rates have already gone down substantially
over the last year, and are currently at an all-time low averaging
between 7.15-7.8 per cent," he said.
According to Rohit Poddar,
Managing Director of Poddar Housing and Development Ltd, the measures
that the RBI is taking to try and boost the economy is positive, however
the central bank must insist on transmission of liquidity and the rate
cuts to the borrowers from the banks and financial institutions, which
is currently not happening as fast as it should be.
Surendra
Hiranandani, Chairman and Managing Director, House of Hiranandani, said
another repo cut by 40 basis points to 4 per cent is also a welcome move
and with the cost of funds coming down for banks now, borrowers will
stand to gain as the EMIs on their home loan are expected to fall.
"However,
quick transmission will be key to the huge liquidity infused by RBI.
All these measures augur well for the real estate sector during such
trying times. We hope that the government will continue to take all the
necessary actions in the near future for the betterment of the overall
economy," Hiranandani said.
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Customs Exchange Rates |
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