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Indian Real Estate News : Lucknow
Industry reaction on increased repo rates
Source: The Times of India Jan 28, 2014
"It is a highly disappointing step by RBI to raise repo rate by 25pbs. It is not going to help RBI curb inflation any more. In fact, in its fight with inflation, Hon'ble governor is completely ignoring the IIP data which is already diving down into negative territory. The manufacturing and construction sector is struggling hard to move on. We were actually expecting a rate cut instead from the apex bank which would have infused some positive vibes in this sentiment driven market. This move by RBI would encourage banks to increase their lending rates which are already beyond reach. I am afraid this rate hike will demoralize home buyers who already prefer fence-sitting due to unstable political scenario. Indeed, it is a bad days for Indian realty."

Aman Agarwal, director, KV Developers

"I do not think there was a need to raise the rate. It is evident that real estate sector has been struggling over the last few years. One of the major reason for this is a lack of ample support from the government policies. In a country like India where the largest chunk of market belongs to mid / upper mid level income group, banks play a major role in defining the buying behavior. This step by RBI would encourage banks to raise their lending rates, thereby impacting buyers' decisions. RBI should understand that without a flexible credit facility, it will be difficult for this sector to grow. We appeal RBI to revise its decision in its next policy review."

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