Realtors hail consistency in rate cut, but stocks down

Even though the real estate stocks were trading down after the RBI sounded hawkish in its guidance, the realtors’ body Credai welcomed the repo rate cut by 25 basis points, and called for continuing the trend by the Reserve Bank of India to pave way for easy financing of the housing industry.

The Reserve Bank of India today cut the repo rate by 25 basis points for the third time since January, as expected, as growth slows and inflation ebbs, but said there is little room to ease monetary policy further, disappointing markets.

The realty index was down by over a percent following the RBI announcement. At 12:51 pm, shares of DLF were down 1.19 percent, HDIL was down 1.75 percent while Godrej Properties was down 1.83 percent.

“We sincerely hope that the RBI will keep up the trend of repo rate cut and facilitate a fall in interest rates so that the EMI burden on common house buyer gets reduced considerably,” said Lalit Kumar Jain Chairman of CREDAI & CMD Kumar Urban Development Ltd.

Jain also stressed the need for the RBI formulating a special policy for the housing industry with focus on affordable housing and quick and equally affordable financing of such projects.

Pointing out that the governments at the Centre as well the States have all been proclaiming that they are committed to affordable housing, Jain said RBI should also play its part by scrapping the negative weightage given to the real estate industry so that the commercial banks took a pragmatic and practical view of housing sector.

CREDAI National President C Shekar Reddy said: “we seek indulgence of RBI and Finance Ministry to stimulate supply and demand in the Housing Sector”.

Samir Jasuja, Founder & CEO of real estate research firm PropEquity, welcomed the cut in repo rate but said the real estate sector requires larger cuts in the repo rate and hopes RBI continues monetary easing in the coming months.