Q

How the REPO rate cut will impact the real estate industry?

09 Aug 19 64
How the REPO rate cut will impact the real estate industry?

1 Answers

A

Pankaj Agarwal

09 Aug 2019 11:39 AM

“The Reserve Bank of India's decision to lower the REPO Rate by 35 basis points to 5.40% will provide much-needed encouragement to homebuyers. In addition to reviving the economy at large, lowering the rate is a fillip for the real estate sector which has been witnessing strong signs of revival in 2019. 

Building on previous rate cuts, this move is expected to lower EMIs on home loans, as well as reduce the debt repayment burden on developers. It presents a great opportunity for the sector as the ease of financing should translate into increased sales and new project launches. Although the rate cut is in line with expectations, there were hopes that there would be a steeper cut in order to boost economic growth that has not yet met FY20 projections.  

The lowering of interest rates combined with recent policy interventions including the implementation of RERA and GST rationalisation will go a long way in reforming the sector and inspiring consumer confidence. 

Overall, the decision will have a positive impact on all stakeholders. Reducing the REPO Rate will prove beneficial from consumption and lending perspective. This will spur demand across all residential segments. Moving forward, we hope the RBI will continue to take positive steps to capitalise on the renewed growth of the real estate sector, and ensure momentum is maintained far into the future.” - Mr. Rakesh Reddy, Director, Aparna Constructions & Estates Pvt. Ltd.

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