CREDAI stressed the need for the RBI formulating a special policy for the housing industry.
New Delhi: Welcoming the RBI decision to cut key policy rates by 0.25 per cent, the real estate sector on Friday said there is a need for further reduction so that the interest cost to builders and home buyers falls considerably.
"We sincerely hope that the RBI will keep up the trend of repo rate cut and facilitate a fall in interest rates so that EMI burden on common house buyer gets reduced considerably," Confederation of Real Estate Developers' Associations of India (CREDAI) Chairman Lalit Kumar Jain said in a statement.
CREDAI has over 10,000 members across the country.
The Reserve Bank today cut the short-term lending rate, or repo, by just 0.25 per cent to 7.25 per cent and kept the liquidity enhancing cash reserve requirement unchanged.
Country's largest realty firm DLF said that the rate cut was "too little" to boost realty sector as well as economy.
Commenting on the policy, DLF Group Executive Director Rajeev Talwar said: "The rate cut is too little to give economy a boost. There is a need for further reduction".
However, he said that if the banks and housing finance companies pass on the rate cut to consumers, it would have a positive impact on the sector.
Echoing similar views, Royal Institution of Chartered Surveyors (RICS) South Asia Managing Director Sachin Sandhir, welcomed the rate cut by the RBI. However, he said the realty sector requires more such incentives.
"To revive investments in the sector, we hope the apex bank would continue monetary easing in the coming months and would further reduce the rates," Sandhir said.
PropEquity Founder and CEO Samir Jasuja said: "We welcome the repo rate cut of 25 basis points by RBI in the latest credit policy review. However the real estate sector requires larger cuts in the repo rate and we hope RBI continues monetary easing in the coming months."
Assotech Managing Director Sanjeev Srivastva termed the repo rate cut as "a good move" and hoped that the rate cut would be passed on to consumers by financial institutions.
"It will boost the situation of recent sluggishness in investment activity and domestic sentiments because interest rate is an important component in driving the economy. It is although small in percentage but a good sentiment booster," Srivastva said.
CREDAI stressed the need for the RBI formulating a special policy for the housing industry with focus on affordable housing. It urged RBI to remove negative weightage given to the real estate industry so that the commercial banks took a pragmatic and practical view of housing sector.