RBI rate cut to boost realty sector – Kumar Builders
Pune: The rate cut by the Reserve Bank of India (RBI) has secured a hope for the prospective buyers in the real estate sector. It is likely to boost the real estate industry and prove favorable for the developers struggling with declining realty sales and high cost of borrowing.
Kumar Builders, a prominent name in realty sector believes that the rate cut will prove to be a confidence booster for the home buyers and eliminate the stagnancy in realty sector. It will further ensure timely completion of the projects and increase the number of launches.
The cut will the boost sentiment of home buyers in the sense that if they buy homes now, they will not pay higher rates. Developers’ liquidity pressure is also reduced. Enthused, the BSE Realty Index, which tracks stocks in the segment, went up about eight per cent, whereas the broader BSE Sensex went up 2.7 per cent. DLF, the country’s largest listed developer, went up 10.4 per cent and Prestige Estates by 11.9 per cent.
The Mumbai-based Dosti group launched a scheme on Thursday which offers an interest rate of 7.99 per cent for its home buyers who have taken loans at up to 10.5 per cent, in select projects. The developer will reimburse amount beyond 7.99 per cent for the first three years on booking of the apartment. If rates go beyond 10.5 per cent, it would also reimburse the increased amount, it said.
However, chief of Confederation of Real Estate Developers Association of India Lalit Kumar Jain stated that a reduction of two per cent in interest rates was needed in a short span. He termed the cut “not enough” and wanted a withdrawal of all liquidity tightening measures and for easing the situation to make cost — for home buyers and developers cheaper.