The Confederation of Real Estate Developers' Association of India (Credai) today urged the Government to focus on development of the housing sector by reducing interest rates.
Reacting to the credit policy, C. Shekhar Reddy, President Credai-National, said, "The real estate sector has been faced with high input costs, high cost of funds and a moderate demand over the last few months. The sector has been ignored and needs immediate focus to build confidence."
Anuj Puri, Chairman and Country Head, JLL India, said, "The RBI is clearly without choices in the matter. The least it could do to remain equitable to all business sectors was to keep the repo rates on hold, which it has done. Any further increase would have added further pressure on already struggling rate-sensitive sectors such as real estate."
"Consumption is already very low in these sectors. Instead of looking for rate cuts, the real estate sector will keep a hawk eye on decreased inflation," he said.
"We hope the era of interest rate hikes has ended," Lalait Jalan, CREDAI Chairman, said.
Jain said, "We hope that the RBI will now look for a consistent decrease in repo rates in the near future. This will have a positive impact on the growth of real estate industry which will give a boost to the GDP growth."
The real estate contributes significantly to the country's GDP. But the development is in a standstill due to the RBI's negative weightage to the industry and the high interest regime that is not helpful to either the developer or the home buyer.
Credai reiterated that the RBI Governor needs to take a pragmatic view of the growth of the real estate industry to help revive the economy and give a boost to the supply side to check price rise.