RBI Rate Cuts Revive Residential Market Across India
Real estate experts across India have observed a resurgence in the residential market following the Reserve Bank of India's (RBI) decision to reduce its key interest rates. The rate cuts have made home loans more affordable, thereby significantly improving home buyer sentiment and stimulating demand within the housing sector.
Residential market started reviving after RBI cut rate.
The RBI's rate cuts have profoundly impacted home buyer sentiment. With cheaper home loans now available, the demand for housing has seen a noticeable uptick, contributing to the revival of the residential market.
Real estate developers and consultants have lauded the RBI's decision, asserting that it will further enhance housing demand and lead to growth in the residential market. They also anticipate the rate cut will attract increased foreign investment.
In a highly anticipated move last week, the RBI reduced its key interest rates, enabling subsidiary banks to offer loans at lower interest rates. The central bank lowered the repo rate by 0.25% to 7.75% and reduced the cash reserve ratio (CRR) by 4%. This CRR revision will inject approximately Rs. 18,000 crore into subsidiary banks, providing them with increased capacity to extend larger and more numerous loans to borrowers.
Experts opine that the residential market will revive as RBI cut rates.
The RBI's move is projected to lower home loan interest rates and further invigorate the residential market. Builders, who have also taken loans from banks, will similarly benefit from the reduction in interest rates.
Commenting on the RBI's decision, Unitech MD Mr. Sanjay Chandra said, "the move is really a positive move. He added that the move would certainly improve the investment along with the housing demand." Government initiatives, coupled with the RBI’s move, are expected to further boost the real estate sector in 2013.
"By reducing the rates, RBI has shown its commitment to improve liquidity in a cash-strapped economy," reported Jones Lang LaSalle (JLL) India, the global property consultant. Mr. Shobhit Agarwal, JLL India’s MD (capital markets), stated that the RBI's move is pivotal to boosting the real estate market. Mr. Agarwal expressed optimism regarding the revival of the residential market, believing that the RBI's policy change will attract more investment and facilitate smoother liquidity flow.