RBI’s decision to cut key rates and grant a three-month moratorium on all term loans will increase liquidity and ease pressure on debt, provided that banks pass these benefits on to their customers quickly, according to real estate developers and consultants.
The RBI lowered the repo rate to 4.4 percent and reduced the bank’s retained cash ratio by 100 basis points. The reverse repo rate has been reduced by 90 basis points to 4%.
Commenting on the development, CREDAI president Jaxay Shah said: “The economy is going through a difficult period. The decisions of the governor of the RBI are now a long-awaited complete package to ease the burden of all financial classes on across the country. “
“We assume that the moratorium covers all home loans, car loans and personal loans of all kinds. It is very important that the hard-working, middle-income tax segment benefit from this flexibility,” he said. he adds.
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NAREDCO President Niranjan Hiranandani said that the RBI’s decision to pump new liquidity into the system would certainly help ease cash flow and debt pressure in the economic system.
“The success of the announcement of the master stroke by RBI will be in the rapid transmission of these liquidity tools across the board to raise appetite at India Inc to accelerate the economic recovery,” he added.
Anarock chairman Anuj Puri said the RBI decision will push the flow of credit across all industries to the shock of the coronavirus.
“Given this time, RBI will ensure that the benefits of lower rates are passed on directly to real consumers, which could potentially translate into more mortgage lenders,” he said.
The three-month EMI moratorium on all outstanding loans will be a major relief for all concerned.
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“Overall, this big-bang announcement by the RBI will benefit all industries, and is undoubtedly the most compelling intervention to date to tame a major economic crisis in the country,” said Puri.
Anshuman Magazine, President and CEO – India, Southeast Asia, the Middle East and Africa said: “RBI is in mission mode to feed the market, preserve financial stability and the timing is crucial.”
The decision to postpone the payment of all term loans for three months will also provide the necessary support to home buyers, he added.
JLL India CEO and Country Head Ramesh Nair said the cut in key rates will encourage banks to take on increased lending to the productive sectors of the economy at a time when credit growth is slowing.
“It is important to immediately transmit these rate cuts to the buyer, which will stimulate consumer sentiment,” he added.
The injected liquidity of 3.74 trillion rupees and the three-month moratorium on all term loans from financial institutions will alleviate short-term liquidity problems and help developers and homebuyers survive in these uncertain times, said Nair.
He said the total outstanding loans from property developers in commercial banks, NBFCs and HFCs are estimated to be around 4.5 trillion rupees in March 2020.
The moratorium will certainly benefit home buyers, as these financial institutions loaned an estimated core of 20 lakh rupees in March 2020, he added.
Knight Frank India CMD Shishir Baijal said that the central bank had checked all the necessary boxes for lower rates, infusion of liquidity and moratorium.
“These measures will help the economy to remain stable despite the foreclosure and economic disruption,” he said.
Dhruv Agarwala, CEO of PropTiger and Housing.com, said: “This will go a long way to reduce the massive pain felt in all parts of the economy and especially in the rate sensitive real estate sector. The RBI has shown determination intend to alleviate what could have been a serious economic fallout from the coronavirus pandemic. “
Gaurs Group CEO Manoj Gaur said mortgage rates are expected to drop 90 to 110 basis points. “For the good of the Indian economy, RBI must ensure good transmission.”
Supertech President R K Arora said the move would boost the housing market and stimulate the economy.
Nayan Raheja, executive director of Raheja Developers, said that interest on home loans could drop to around 7%, which bodes well for the real estate sector.
Rohit Gera, MD, Gera Developments, said, “Reducing interest rates will ease the burden on individuals and businesses, as will the moratorium.”
Avneesh Sood, director of the Eros group, hoped that the banks would pass the benefit on, thereby lowering the cost of interest for developers and home buyers.
Ashok Mohanani, president of Mumbai-based Ekta World, said: “Today’s announcement has instilled in the minds of panicked citizens that the economy will recover in the near term.”
Bhutani Infra CEO Ashish Bhutani said: “From the reduction in rates to the infusion of cash to the moratorium on loan repayment, the measures will help individuals and organizations cope with the current situation.”
Kaushal Agarwal, President of The Guardians Real Estate Advisory, said: “We believe that banks will finally pass the benefits of current and previous rate cuts on to customers. This will significantly reduce the cost of borrowing for applicants. ‘immovable. “
The NDE moratorium will help manage the current crisis, said Ankush Kaul, president (sales and marketing) of the Ambience group.
Poddar Housing CEO Rohit Poddar said: “We welcome these measures because without them the economy will go into deflation.”
Sushma ED Prateek Mittal has said that mortgage rates will fall sharply, which will boost demand for housing when the situation normalizes.
This is a major step to improve liquidity conditions, encourage growth and maintain financial stability, said Ashish Sarin, CEO of AlphaCorp.
Honeyy Katiyal, founder of Investors Clinic, described these steps as “the need of the hour” to stimulate the real estate sector and the global economy.