Real Estate Leaders React To RBI Monetary Policy

RBI
RBI

The Monetary Policy Committee (MPC) of the Reserve Bank of India on Friday has decided to keep the repo rate unchanged at 4 percent. The reverse repo rate stays at 3.35 per cent. On a review of monetary and liquidity conditions it was decided to restore CRR in two phases – CRR will be raised to 3.5% from March 27 and 4% from May 22.

In a major reform, RBI proposed to provide retail investors access to the government bond market, both primary and secondary, directly through the central bank. Retail investors would now have direct access to participate in the G-Sec market.

RBI’s monetary policy announcement has been receiving a mixed response from the real estate sector.Here is what the industry leaders feels about the subject, as told to Realty Buzz IN.

Dr Niranjan Hiranandani, National President- NAREDCO 

Under the given market scenario and circumstance , the RBI’s direction on unchanged repo rate is very much on the anticipated lines, though a rate cut would have been better to combat the negativity of pandemic led economic crisis across the industry. As the economy is gradually opening up and getting back on track to restore the lost momentum, the regulator has indeed brought innovative liquidity injection measures to maintain the policy stability and ensured that additional liquidity is provided. It is extremely important for the regulator to balance its borrowings from the market so that it doesn’t jeopardize the financial stability and disrupts other market players.

Dr Niranjan Hiranandani –National President- NAREDCO 

The new policy’s paramount objective of economic revival were addressed by announcing an innovative measures like enhancing liquidity by allowing NBFC to tap TLTRO on tap scheme, allowing additional credit for small MSME borrower’s up to Rs 25 lakhs, exemption to FPI investment in defaulted corporate bonds to boost further investment in recaptured economic revival and firming up consumer protection.  The observation that sales and new launches of residential units in major metropolitan cities reflect a renewed confidence in the real estate sector’ reinforces the need for further positive booster dose to strengthen its core revival that enacts a multiplier effect on 270 allied industries.

Mr. Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani

RBI’s decision to keep policy rates unchanged is welcome and signals the government’s focus on fuelling consumption. Given that the economy is well on its path to recovery and the Government’s continuous efforts to promote ease of doing business, digitization, focus on infrastructural development and capital expenditure will help the real estate sector business going forward.

Mr. Surendra Hiranandani, Chairman and Managing Director, House of Hiranandani

With regards to the real estate sector, the government has continued on its stated path of supporting sector specific sops and in light of this, we are optimistic that the government would initiate steps soon to address the immediate liquidity issues and changes in the GST regime amongst others. The entire focus would now be on how the government plans to boost demand and a lot needs to be done for the sector to improve the pace of growth.

Dhruv Agarwala, Group CEO, Housing.com, Makaan.com and Proptiger.com:

The decision of RBI to keep the Repo Rate unchanged along with accommodative stance is understandable at this juncture, although a further cut in the key rates would have given a boost to current demand uptick that we have seen recently.

The measures announced by the RBI Governor today for liquidity enhancement in the economy is indeed a good step and was much required. Real estate has been badly hit during the pandemic and the recent Budget announcements and the RBI’s decision today will help the sector to cope up with markets’ uncertainties better in the near future.

Pradeep Aggarwal, Founder & Chairman, Signature Global Group, Chairman, ASSOCHAM, National Council on Real Estate, Housing and Urban Development

Increased demand is already enjoyed by the affordable housing market, and the RBI’s new unchanged stance will not have much impact on demand per se. Indeed, the RBI’s growth forecasts will instill optimistic market sentiment, which will translate into good numbers for the real estate sector as well. If the economy recovers, which is likely after the RBI said in the MPC review that it will preserve market liquidity and the job market remains vibrant, then the buyer of the affordable housing segment can speed up the property ownership process.

Mr.-Pradeep-Aggarwal-Chairman-Signature-Global
Pradeep Aggarwal, Founder & Chairman, Signature Global Group, Chairman, ASSOCHAM, National Council on Real Estate, Housing and Urban Development

Right now, we understand the step taken in this MPC by the RBI and hope that growth forecasts will improve, leading to a vibrant real estate sector market.

Amit Modi, Director ABA CORP, President-Elect CREDAI Western UP

The RBI announcements have been very much on the expected lines, even though no measures were made for real estate and home buyers particularly in the Budget gone by. It would have been a relief, if some benefit were extended to the sector today, as the experts awaited it. The repo rate remains unchanged at 4%, however for the industry to revive we are still expecting some kind of stimulus from the Union government and RBI in its forthcoming policy meetings.

Kushagr Ansal, Ansal Housing and President, CREDAI, Haryana

In its recent monetary policy review meeting, the Reserve Bank of India (RBI) retained the status quo on key policy rates in line with expectations, keeping key policy rates unchanged. Given that the repo rate at which the central bank loans money to scheduled commercial banks in India is already at a record low of 4%, there has certainly been little scope for further reductions.

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