Builders of the country were expecting a change in the Repo Rate which would have lowered interest rates on home loans. Thus helping the common man buy flats.
By Varun Singh
Builders are an upset lot today, they say that the community has faced a double brunt.
First they face the budget which made no major provisions for them and now the repo rate, which has done not much help.
NAREDCO Vice Chairman Parveen Jain says, ‘The unchanged bi-monthly repo rate should have been lowered by which the interest rates of home loans could have been brought down and which would have benefited the Housing Finance. This needs to be considered methodically and hope the Repo-rate is lowered next time as it is bi-monthly, for the benefit of the buyers and for the Real Estate sector as an entity.”
The stand by the RBI on repo rate has aggravated the woes of the real estate sector, is what most builders believe in.
Rajan Bandelkar President, NAREDCO West says, “The accommodative stance of the RBI in the wake of the inflationary trend has simply aggravated the woes of the realty sector, which is grappling with liquidity. It is yet another shocker after a disappointing Budget, which will have a rippling effect on the sector unless the RBI takes up concrete moves to stem housing demand by the supply of cheaper loans and taper inflation.”
Bandelkar further added, “The RBI had no other way than to extend some relief to the realty sector by allowing not to downgrade realty loans for genuine delays and granting additional time for repayment. While it will give a window to manage scarce finances for a certain period, it will not completely ease the sector’s financial stress. Earlier, the repo rate reductions did not translate effectively into the banking system. Now, the RBI must look into this issue for boosting housing demand. ”
With the status-quo, now the builder community expects that the government ensures some liquidity in tis category and ensures banks follow it.
“Holding on repo rate twice indicates growth on backburner, eyes on inflation targets”, says Dr Niranjan Hiranandani, President – Assocham & NAREDCO. He says that, “After fiscally lacklustre economic budget, the RBI’s accommodative stance by unchanged repo rate at 5.15% is a jolt to the economic growth momentum.”
