NAREDCO national president Niranjan Hiranandani said with the short term liquidity squeeze prevailing in the economy, even positive net worth companies across the industries.
Realty players termed the Reserve Bank of India's decision to lower the repo rate by 25 basis points to 5.15 ''tepid and a notional nudge,'' and said that its efficient transmission by banks to lower cost of capital is need of the hour. Further, a substantial rate cut is required to stimulus consumer demand.
RBI decision comes at a time when the realty sector is still saddled with 6.56 lakh unsold housing units (as of Q3 2019) across the top 7 cities including Mumbai, and developers are struggling to raise funds to complete projects and launch new ones.
Knight Frank India CMD Shishir Baijal said a slew of factors such as slowing economic output, rising unemployment rate and low consumer confidence have hindered the percolation of these small quantum rate cuts to the economy at large.
''On this backdrop, another 25 bps rate cut comes as a disappointment, more so for the real estate sector. The aggravating non-banking financial company (NBFC) liquidity crisis is severely impacting credit availability for the industry, especially developers, as they struggle to raise even construction finance. .
NAREDCO national president Niranjan Hiranandani said with the short term liquidity squeeze prevailing in the economy, even positive net worth companies across the industries.
''The current economic scenario makes it the right time for RBI to announce its one time roll over scheme similar to that which was rolled out during the Lehman crisis in 2009 under the global slowdown scenario," he noted. However, ANAROCK Property Consultants chairman Anuj Puri said the rate cut comes close on the heels of the recent announcement of setting up a stress fund of Rs 20,000 crore to provide last-mile funding to projects stalled due to lack of capital.
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