The real estate industry was disappointed with the RBI keeping key rates unchanged.

Mr Lalit Kumar Jain, President of the Confederation of Real Estate Developers’ Association of India, said it was a disappointment once again from the RBI.

There was no change in the rates in the previous policy and the real estate sector was expecting a rate cut this time. Both the developer community and home buyers are unhappy and this will affect the already disheartened real estate sector.

“We do not see any positive policies from the government to boost the real estate sector and economy as well. We keep our fingers crossed and hope the next credit policy will bring some cheer,” he said.

The President of the Maharashtra Chamber of Housing and Industry, Mr Paras Gundecha, said the RBI’s decision was “absolutely shocking’’.

“The real estate sector is already facing difficult times, and a rate cut would have been a boon and fuelled growth. This will further affect the already demoralised real estate sector.

“We feel there is a need for an intervention from the Finance Ministry so that the real estate sector and the economy did not get into depression,” he said.

Mr Anshuman Magazine, Chairman, CBRE South Asia, said the real estate market direly needed a rate cut to boost investor sentiment. The sector is the growth-engine of the nation’s economy, but it seems the sector does not figure in RBI’s policies at all. This decision will further affect the already burdened real estate sector in the country.

The Chief Economist of RICS, Mr Simon Rubinsohn, said it was a disappointment despite the lowering of the statutory liquidity ratio.

The prospect of a softer economy coupled with little additional stimulus from the central bank suggests that the flatter trend in the commercial real estate sector, which was highlighted in the RICS survey, will persist through the second half of the year with weaker occupier demand feeding through into rent levels.

For the residential sector, prices in key centres are likely to remain generally firm, he said.

Mr Brotin Banerjee, Managing Director, Tata Housing, said the housing market will see a revival once the general economic conditions improve.

Although investor sentiment is depressed at this time, partially due to high policy rates, the demand from consumers looking to purchase their first residence remains steady. Such consumers are aware that policy rates will average out over a 15-20 year period and are willing to invest if they find the project compelling.

(This article was published on July 31, 2012)
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