Realty sector 'disappointed' on RBI's status quo on rates

CREDAI said that the industry was expecting relief from the apex bank to beat slowdown in property demand.

Updated: Jul 30, 2013, 21:12 PM IST

New Delhi: Realtors' apex body CREDAI on Tuesday expressed disappointment over RBI's decision to keep the key policy rates unchanged, saying that the industry was expecting relief from the apex bank to beat slowdown in property demand.

Global property consultant CBRE's South Asia Chairman and MD Anshuman Magazine also said that providing a boost to the sluggish real estate market is the need of the hour.

"The real estate sector, which is already under pressure due to slowdown in economy, was expecting a breather from the apex bank. But, RBI's status quo on rates has left us hugely disappointed," CREDAI-NCR President Anil Kumar Sharma said.

The cut in growth forecast should have alarmed RBI to take some urgent measures to promote development, he added.

"The RBI’s decision to keep the key policy rates unchanged is on expected lines, considering its priority is now to defend the weakening rupee," Anshuman Magazine said.

He, however, said that it is also important to take steps to support economic growth, considering the low investor sentiment prevalent in the market.

"The real estate market remains sluggish, and it was the need of the hour to provide a boost to the cash-strapped market," he added.

Commenting on the RBI monetary policy, Tata Housing MD and CEO Brotin Banerjee said: "For borrowers, this doesn’t bring in any change from the previous June policy, as most lenders will keep rates on hold at least till the next policy in mid-September."

For developers, he said that residential property sales are likely to remain same as they were earlier.

"The fact that the RBI refrained from increasing the rates is a positive sign. However, this particular monetary policy was more about liquidity strengthening and arresting the damage being caused by rupee depreciation," SARE Homes Executive Director David Walker said in a statement.

Walker said if CAD improves and the liquidity measures are rolled back, the demand will improve in the real estate sector by the end of the year.