The real estate sector has welcomed the Reserve Bank of India’s announcement, though most developers say they continue to be concerned about liquidity issues.
Dhruv Agarwala, Group CEO of realty websites Housing.com, Makaan.com and Proptiger.com, said the RBI’s move will not only help developers but also homebuyers who have been under extreme pressure due to the prolonged lockdown. “What needs to be seen is how quickly the banks reflect this change in their respective rates,” he added.
Amit Modi, President-Elect Credai Western UP and Director ABA Corp, said banks need to ensure there is quick transmission of the announced rate cuts to the end consumer. “The RBI and the government should proactively make sure that the benefits reach the end consumer,” he said.
Supply-side bottlenecks
Ankit Kansal, CEO, 360 Realtors, said the RBI measures will help in managing supply-side bottlenecks by providing better and easier credit to developers and boost demand in the form of cheaper home loans.
Anuj Puri, Chairman, Anarock Property Consultants, said the rate cut will not only send out positive signals, but also enable banks to lend more.
Raj Sharma, spokesperson for Chandigarh-headquartered GBP Group, said the recent reduction in repo rates and reverse repo rates will improve liquidity. “The real estate sector has always been struggling with liquidity. This comes as a breather for borrowers and developers. We have been waiting for a timely transmission of these benefits to borrowers. The extension in EMI moratorium for three months also provides sufficient time to end-users and businesses to plan their altered financial structure.”
Penalty exemptions
Realty majors opined the regulator’s support to NBFCs to improve their liquidity would mean better access to capital for developers, but many were also looking ahead to penalty exemptions for the delay in project completion.
Prateek Mittal, Executive Director at Sushma Group, said the extended term loan moratorium period will provide relief towards liquidity for developers, who could now focus on the faster execution of projects.