Real estate developers have hailed the reduction in lending rate by the Reserve Bank of India (RBI) ahead of festival season stating that it may give a fillip to housing demand.

RBI reduced the short-term lending rate, or repo rate, by 25 basis points to six per cent at its third bimonthly policy review.

“ The Indian economy is at a point of inflection. Easing procedural bottlenecks, speedier project clearances and reviving credit flows to the productive sectors such as real estate are critical for the economy to decisively move to a higher growth trajectory. Another small rate cut in the coming months should not be ruled out,” Rajeev Talwar, CEO, DLF Ltd said.

Shishir Baijal, CMD, Knight Frank India said, “Considering the battery of new reforms in force, a good monsoon in progress, benign inflation numbers, favourable global environment and the overall uptick in industry sentiments a healthier lending rate could have provided the much needed thrust to fuel India’s growth story”.

Brotin Banerjee, MD & CEO Tata Housing Development Company Ltd said, “With the market view calling for measures that encourage investment to boost growth numbers, and with the installation of a regulatory regime for the real estate sector, we expect this move to keep the stimulus on for potential home buyers to invest, and to benefit current borrowers.”

"Home loan is a must for a mid-segment home buyer. Higher EMIs due to high interest rates make consumers deterrent from buying homes. Lowering of interest rates helps in making faster decisions as it becomes affordable to majority of consumers looking to buy a property. This should also give the required boost to the Realty sector, especially in the affordable housing market,” said Abhimanyu Londhe, CEO, SMC IM+ Realty Fund.

“The real estate sector has been working hard to bring about increased transparency and ease of doing business with months of toil to implement RERA. The announcement is the very catalyst required to attract investors and spark about a surge in demand, ahead of the auspicious season of festivities to start post August,” said Sanjay Shenoy, Joint MD, Legacy Global Projects.