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The Confederation of Real Estate Developers' Associations of India (CREDAI) has applauded the Reserve Bank of India's recent 50 basis points cut in the repo rate, describing it as a timely and courageous move aimed at stimulating demand in the housing market. With this latest step, the cumulative reduction now stands at 100 basis points over the past six months. CREDAI believes the decision will significantly improve buyer sentiment, especially in the mid-income and affordable segments, and enhance the financial viability of projects catering to this market. The move comes at a time when housing sales have shown a decline in major cities, indicating the need for strong policy support.
India?s apex real estate body, the Confederation of Real Estate Developers' Associations of India (CREDAI), has praised the Reserve Bank of India?s recent decision to slash the repo rate by 50 basis points, referring to it as a bold and much-needed intervention to revive housing demand. Advertisement
CREDAI President Shekhar G Patel remarked that the rate cut would go a long way in boosting consumer confidence, particularly within the mid-income and affordable housing segments?areas that have experienced a prolonged period of stagnation. He noted that the industry has welcomed the move wholeheartedly and considers it a decisive step by the central bank to stimulate domestic demand and revive momentum in the real estate sector.
Patel explained that the timing of the rate cut is critical, as the country is currently witnessing an uptrend in real estate activity, not just in metros but also across Tier 2 and Tier 3 cities. With lending rates now lower, he said, home loan affordability is expected to improve substantially especially for interest-sensitive categories. This, in turn, would likely reduce EMI burdens, thereby uplifting buyer sentiment and encouraging more first-time homebuyers to make purchase decisions.
He further highlighted that the cumulative reduction of 100 basis points in the repo rate over the past six months had proven to be a well-calibrated strategy, aligning with the larger objective of economic and housing market revival. Patel expressed particular optimism about the impact on affordable housing, noting that this segment has been under considerable strain from both demand and supply perspectives.
He indicated that the lowering of interest rates not only makes home purchases more accessible to end-users but also enhances the economic feasibility for developers to launch and complete affordable housing projects. With financing costs becoming more manageable, supply-side players may be more inclined to commit to budget-friendly developments.
Recent trends shared by property consultants have revealed that housing sales had declined in seven to eight major cities during the January to March quarter when compared to the corresponding period last year. This underscores the urgency of intervention, and CREDAI believes that the RBI?s decision arrives at an opportune moment to help reverse this slowdown.
The move could serve as a catalyst for first-time buyers, many of whom had delayed decisions due to cost concerns. While interest rate reductions alone may not resolve all structural challenges, they certainly offer a strong foundation for broader growth, especially if supported by complementary policy measures and swift transmission by financial institutions.
Source - PTI
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