Realtors unhappy over status quo in monetary policy

NEW DELHI: Realtors' apex body CREDAI today expressed disappointment over RBI's policy to keep key policy rates unchanged and sought a cut in interest rates to boost housing demand.

"The Confederation of Real Estate Developers' Associations of India is disappointed with the status quo on the RBI policy rates and demands a reduction in interest rates to facilitate lowering of entry barrier and spur demand for the real estate sector," the organisation said in a statement.

CREDAI said there is a need to devise a formula to make home loan rates independent of inflation, keeping in view the mission to provide housing for all by 2022 and exponential impact of the realty sector on triggering the GDP growth.

"The real estate sector has been dabbling with high cost of land, labour, material, funds & high rates of taxation along with the moderate demand over the last few months. The industry was looking forward to a reduction in interest rates and improved liquidity to usher growth and development," CREDAI President C Shekar Reddy said.

For the fourth time in a row, RBI kept key interest rates unchanged today maintaining that it will not cut them unless inflation moderates to anticipated levels, disappointing borrowers and the industry in this festive season.

CBRE South Asia Chairman & MD Anshuman Magazine said: "The RBI's move of keeping base rates unchanged was expected by the industry".

"Gradually weakening inflationary pressures, along with improving performances by the manufacturing, construction and services sectors have been encouraging signs for further economic improvement by the second half of the year. Any reduction in base rates in coming months will be a positive indicator for the real estate sector," he added.

Real estate sector is facing a huge slowdown in demand, particularly in housing segment since last few years due to high interest rate on home loans and rising property cost.