Realty firms say cut paltry

Real estate players have said a rate cut of 35 bps is insufficient to significantly improve buyer sentiment in the mid-income segment, which still has a staggering unsold inventory of 2.17 lakh units in the top seven cities. 

They argue that the demand for affordable housing, which accounted for 2.40 lakh unsold units in these cities, may see improvement. They say the onus is now on the banks to transmit the rates in the form of cheaper loans.

Anarock Property Consultants chairman Anuj Puri said this rate cut, even if adequately transmitted by banks, will not do much for mid-income housing in tier 1 cities where the main concern is unaffordable property prices.

“Even minor downward revisions in interest rates can and do make a difference in affordable housing. If banks transmit this reduction in the prime lending rate to consumers, budget housing demand may improve. Likewise, housing demand in tier 2 and tier 3 cities, where property prices are less prohibitive, may see an uptick,’’ Puri said.

Knight Frank India CMD Shishir Baijal said, “The NBFC liquidity crisis has severely choked credit availability for the industry, especially developers, as they struggle to raise even construction finance. More needs to be done to provide a liquidity stimulus to the broader real estate spectrum,’’ he noted.

Poddar Housing and Development managing director Rohit Poddar said banks lending to registered NBFCs for housing up to Rs 20 lakh per borrower is positive news for the real estate sector. 

“Additional interventions will also be required to try and provide a boost to the economy,” he opined.

According to Ruparel Realty MD Amit Ruparel, RBI’s move will have a positive impact and thus accelerate momentum in the real estate sector.