RBI rates: Realty sector hopes for cuts in 2015

In the current scenario, where the Indian real estate market is struggling to pick up, the Reserve Bank of India’s (RBI) decision to keep the key policy rates unchanged has indicated that RBI is only looking towards taming inflation, feels the real estate sector.

Check out property options across the country!

To grow and chase the mission of ‘Housing for All’, the need of the hour is immediate liquidity. Had RBI cut the rates, it would have been a boon for the real estate sector, shares the industry.

Need property related advice? Click for Magicbricks!

As declared by RBI, the Repo Rate continues to be at 8 per cent while the Cash Reserve Ratio (CRR) has also been retained at 4 per cent. The RBI Governor, Raghuram Rajan, said that a shift in stance is ‘premature’ but hinted that a cut may take place early next year if inflation continues to ease and government acts on the fiscal side.

Rohit Raj Modi, president, CREDAI NCR, says, “It is quite evident that RBI is at status quo. It is looking towards curbing inflationary factors. At a time when the sector is coming out of a not-so-good festive season, a mere reformatory announcement from the government would not do much. It should be supported by monetary liberty. We expect RBI would consider this at its next review and would lower key rates to boost the real estate”.

In the bi-monthly review of the monetary policy, Rajan said he expects it to ease further and average at 6 per cent.

However, understanding RBI’s move Shashwat Sharma, partner, KPMG, India says, “The inflation which has come down today is not because of structural changes in the domestic economy but due to drop in international prices of crude, which has fallen to a historical low. Therefore, we appreciate the RBI’s stance on ‘no cut in interest rates’ and look forward to structural changes by the government in the domestic economy.”

It is evident that the real estate sector would have to wait for some more time to see a cut in key rates.

Source: http://content.magicbricks.com/industry-news/rbi-rates-realty-sector-hopes-for-cuts-in-2015/79468.html