Even after RBI’s status quo, developers optimistic about realty growth

As the MPC voted unanimously to keep rates steady, the RBI retained the status quo and Repo rates unchanged at 4 per cent. The Apex bank, however, has shown optimistic stance for economic growth as it expects GDP to grow at 10.5 per cent.

The real estate sector expected some announcements, but it has to rely only on announcements made in the last few months. Real estate experts say the market is strong, and the RBI’s new status quo will not have any adverse effect on it.

During the lockdown, the announcements of repo rate cuts by the apex bank helped the reeling real estate market. In addition to the rate cuts, RBI took steps such as the rationalisation of risk weightage requirements, the restructuring of project-based loans, linking home loans and LTV; the strength of policy changes made over a period of several months represent the positive intention of the authorities to support major sectors such as real estate.  

“The onus of ensuring continuous funding rests solely on the rapid disbursement of funds by banks. Interest rates on home loans are at their lowest, which has already shown a positive effect on the residential segment. It is likely that the next quarter will see more of it and report a positive curve,” says Yash Miglani, MD, Migsun Group.

Maintaining that the recent decision of the RBI to maintain the status quo was expected due to the pace observed in the market, Vijay Verma, CEO, Sunworld Group, says, “Apex bank has also gone beyond the normal adjustments and over the past few months implemented major policy changes, benefiting both buyers and developers.

This has given the market a certain degree of vibrancy, following the quietness in the market that lasted for almost a quarter. Residential real estate after post-unlock deferment payment plans has been fairing well. With GDP growth estimated at 10.5 per cent, we hope that the real estate sector will contribute a substantial share to overall economic development.

The sector is still bullish, and the sales figures over the past few months are an indicator that the low home loan interest rates are enjoyed by buyers. “Real estate sales, especially after home loan interest, have improved and will further improve if, following the announcements made by Maharashtra, Karnataka, and Madhya Pradesh, other states reduce stamp duty.

The sector will benefit a lot as demand is already strong and a reduction in stamp duty will provide a further boost,” says Ashok Gupta, CMD, Ajnara India Ltd.

Commenting on the RBI’s latest stance, Dhiraj Jain, Director, Mahagun Group, states, “In the last few months, the government and the bank have taken several steps.” If there is rapid implementation, then several problems can be solved.

One such announcement was the restructuring of the loan that would enable stuck projects and bring more projects to the market. In the coming quarters, Apex Bank has shown a positive outlook for GDP growth, which would certainly have a healthy impact on the real estate sector as well.”

The government and the RBI have taken decisions over the past few months aimed at moving down the direction of economic recovery, and real estate has been searching for packages that can help speed up the process. Ankur Bhatiani, Director, Urbainia Spaces, says, “Although we understand the position taken by the RBI, we still feel that announcements that could have an immediate impact on delivery and sales are needed in the real estate sector. Now, the need is for the RBI to ensure that the previous announcement is seriously enforced. The big effect of such announcements is yet to be seen by the market. We hope that individual banks will take the appropriate measures and keep the real estate industry on their list of priority loans.”

Realtors say customers are now back, and the sector will now rely on the completion of projects to instil more investor trust. Harvinder Singh Sikka, MD, Sikka Group, states, “We followed the different reports and were ready for the RBI’s status quo. We feel that special attention should be paid to the sector which contributes to the country’s economic growth. The RBI should ensure that banks extend lending support to the sector.”

Dhiraj Bora, Head of Marketing and Communication, Paramount Group, adds, “We should praise the RBI for extending a helping hand to the real estate sector because in the last few announcements it has taken care of the interest of buyers and developers. The industry must focus on deliveries and employ marketing tools before the next announcement that will help the demand.”

“We are pleased that the RBI is positive about the growth of GDP,” says Sagar Saxena, Project Head, Spectrum Metro. Speaking about the commercial segment, he adds,” The retail sector will be the key beneficiary of such an optimistic real estate outlook, as it depends on customer spending and business expansion. A big jump is now witnessing the demand for office spaces and commercial areas, and people are coming out to spend in malls.”