RBI Cuts Rate To Boost Affordable Housing To Boost Affordable Housing

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Even RBI has come to the line to promote PMAY flagship project ‘Home for all by 2022’. Real estate experts consider that the apex bank of Indian economy has cut the repo rate at the onset of the Indian festive season just to boost the demand for affordable housing sector. A good monsoon in progress, low inflation numbers, favourable global environment and overall uptick in industry sentiments- bank has pointed out these facts as the catalyst of the recent rate cut.

RBI slashed the repo rate by 25 basis points to 6% at its third bimonthly policy check. The revised repo rate will go well with the two major policy reforms by the government ‘RERA’ and ‘GST’ which will eventually be favourable for the both buyer and the developer, during the investment in affordable housing. A rightly measured rate cut is the appropriate mediator to push the realty business. Affordable housing sector is not beyond that. By far the Central Bank has reduced their short-term lending rate 175 bps since 2014. With this revised rate cut the sluggishness of Indian real estate market will be recovered to a great extent.

Affordable housing in fact fed the real estate during the post demonetization season; while the entire market had fallen flat. The sector has been kept out of GST purview. The rate cut couldn’t have come more right time than this, when the affordable housing sector is expecting to be soared. Banks even relaxed the home loan percentage on purchasing affordable flats. Luring with the input tax credit by the government, market is expecting some major cash inflow from the domestic and overseas investment sector. The repo rate is beneficial at this moment as the current inflation rate is hanging at low levels less than 2%. Real estate sector has been on the way to be recovered by the means of low construction rate, supervision of RERA, lower price of ready to move apartments post GST and now with revised repo rate by RBI.

Real estate industry is hoping some positive come back as RERA is set to bring the accountability and visibility of the real estate business. RERA won’t allow any fraudulence in realty business. This move will surely able to bring back an investment boost along with the primal sentiment of home-buying. There is a temporary market slowdown observed after RERA enforcement. New project launches have been significantly shortened. This revised repo rate is a 7 year low. Nevertheless, the rate cut announcement sends out positive signals to the foreign investors and PE firms. With various progressive measures government will set affordable housing sector the big ticket of future investment. Indian real estate market is stepping towards progress with the deployment of RERA and GST rollout. Moreover rate cut comes as amen to Indian realty growth.

_LNN (Liyans News Network)- Visit www.liyans.com- the leading property portal in Kolkata to keep yourself updated with the latest news on Indian real estate and track every move of the market from the inception.

1 thought on “RBI Cuts Rate To Boost Affordable Housing To Boost Affordable Housing”

  1. Excellent posts.I am very happy to read this. This is the kind of manual that needs to be given and not the random mis information that’s at the other blogs.
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