Tag Archives: home loan procedures

Marginal rate cut & turnaround?

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Bottom Line: It is not about impact of rate cut but the homebuyers’ psychological shift indicates revival.  

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, RBI, Reserve Bank of India, home loan proceduresAt a time when the discussion across the country has been on the decks being cleared for the formation of real estate regulator, Anurodh Agarwal, a homebuyer was wondering whether to jump from the fence sitting to buy a house now. The dilemma was not just about whether this is the right time to buy. He was rather thinking that even though his concerns with the functioning of the sector and the delivery processes were addressed with the regulator, the interest rate was still higher.

He was not alone to be apprehensive with the high interest rates. There have been many fence sitting buyers like Anurodh who think the interest rate was too high and hence it was better to wait for some rate cut before they could buy a house. The announcement of Reserve bank of India (RBI) Governor Raghuram Rajan to cut the repo rate has hence addressed their concerns to a large extent now.

The RBI Governor Raghuram Rajan in his bi-monthly monetary policy review has cut the repo rate by 25 basis points to 6.5 per cent; thus clearing the decks for home and auto loans, among other loans, to become cheaper. The policy interest rate has been now lowered to more than five-year low, while indicating the prospect of another cut later this year if inflation trends stay benign.

It may be argued that a rate cut of 0.25 basis points would not make any significant impact on the EMI burden of the homebuyers. But the fact of the matter is that the sector has been reeling under slow sales mainly due to the subdued sentiments. Most of the home seekers were fence sitting, either concerned with the delivery timelines or with anticipation of rate cut, if not price correction.

The rate cut, therefore, has come at the most appropriate point in terms of the timing. While the sentiments have significantly improved post the clearance to a real estate regulator for the sector, the repo rate cut can have the multiplier effect.

The critics may also argue that this is only a marginal rate cut in terms of the EMI burden of the homebuyers, but the RBI Governor has put the ball in the court of the banks. The onus is now on the banks as to how much interest rate they cut to revive the business and the market. The pressure is definitely mounting on the banks to reduce the interest rates, as they have not passed on the full benefits of previous rate cuts to the consumers.

Both the homebuyers as well as the developers have nevertheless welcomed the rate cut. They feel it will have a multiplier effect along with the real estate regulator. The rate cut may be marginal this time around, yet it has the potential to impact the psychology of the homebuyers.

Welcoming the rate cut, Manju Yagnik, Vice Chairperson, Nahar Group feels this will create positive sentiments and spearhead growth for the realty sector, bringing some respite to customers with home loans during the upcoming festival of Gudi Padwa and Akshaya Tritiya.

“The real estate sector is going through a makeover and we welcome any sops given by government at this stage that will help in propelling the sector. This rate cut is significant in terms of sending out a positive signal to homebuyers and industry alike that government is serious about providing housing to its people,” says Yagnik.

Kishore Bhatija, Managing Director – Real Estate Development, K Raheja Corp calls the repo rate cut as a step in the right direction. “Although there were higher expectations of the cut, this is certainly good news for developers as well as buyers.  It is also encouraging to hear that going forward the Central Bank’s policies will remain accommodative. We hope the banks will pass on the benefit to the industry.”

Ashwin Sheth, CMD, Sheth Corp also feels the accommodative stance and the indication towards further easing of policy rates will renew further interest in the real estate sector. According to him, the reduction in the repo rates will help in bringing down the home loan interest rates which in turn is likely to bring in some amount of relief to the homebuyers. But, the banks will also have to pass down the benefit to the homebuyers to encourage the prospective buyers to move a step closer to purchase their dream home.

“Interest rate is one of the important factors as the Equated Monthly Installments (EMI) is directly linked to it. Therefore, if the banks pass on the benefits and the EMIs fall, we feel the demand for the housing should witness momentum as far as buying new properties are concerned. Faster GDP growth and declining interest rates will help real estate companies generate more sales and propel the growth of the industry,” says Sheth.

There is a general feeling within the built environment of real estate that the rate cut has been announced keeping in mind the thrust of Government of India on ‘Housing for All’. It is hence expected that there will be more rate cut in near future, thus catalyzing the demand in the sector. Most of the analysts believe this kind of sops have critical linkage with the potential of the sector in job creation, improving social infrastructure and give a boost to the Indian economy as a whole.

However, the big question remains: whether the banks will pass on the benefits of the rate cut to the consumers? If only the banks could sense big business ahead if they reduce the rate of interest, then this marginal rate cut will be the beginning of the turnaround of fortunes of the real estate sector in general and housing market in particular.

Realty players seek more cuts in RBI rate to boost sector

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india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, RBI, Reserve Bank of India, home loan proceduresTrack2Realty-Agencies: Real estate players and analysts on Tuesday welcomed the Reserve Bank’s move to cut short-term lending rates, but said that more such steps are needed to bring growth back to the sector.

Confederation of Real Estate Developers Associations of India (CREDAI), however, termed RBI’s repo rate reduction by “just” 25 basis points as a “missed opportunity” and urged it to ease funding options in realty sector.

“One would have expected RBI to be realistic and appreciate the fact the real estate industry supports hundreds of other industries and hence plays a major role in rejuvenating the economy, hit by job losses and dwindling investments,” CREDAI National President Lalit Kumar Jain said.

The RBI should take steps to ease funding for real estate sector at much lower rates in the interest of millions of home seekers, and ease Cash Reserve Ratio for banks to further enhance liquidity in the system, he added.

Jain said, “It is high time that we looked at enhancing growth by infusing liquidity and going in for rate cut… We cannot hope to make housing affordable for the masses with such restrictive policies…the continued stubborn approach of RBI is shocking.”

Leading realty consultant Cushman & Wakefield (C&W) said the apex bank has taken the right step to boost economic growth through reductions in key interest rates, although the reduction of 25 basis points is a small one.

“If this rate cut also translates in further lowering of loan interest rates by banks for businesses and for home buying consumers, then we can definitely expect to see some momentum in a slow and anxious real estate market that was left largely disappointed by the Union Budget,” C&W Executive Managing Director (South Asia) Sanjay Dutt said.

Welcoming the rate cut, CHD Developers Managing Director Gaurav Mittal said the step is slated to be beneficial for both the buyers as well as the developers, who have been struggling with cash crunch in recent times.

Real estate private equity firm Fire Capital Chief Executive Officer Om Chaudhry said reduction in lending rates will help the sector with low interest on home loans.

The 3C Company Director (Sales and Marketing) Brijesh Bhanote said: “Since the beginning of year, the second time repo cut clearly indicates the concerns of central bank to support the revival progression of Indian economy and to narrow the fiscal deficit.”

M3M India Director Pankaj Bansal said a further reduction expectation will give encouraging outlook to the economy and the developers can expect more inflow towards equity market.

Realty research firm PropEquity Chief Executive Officer Samir Jasuja said the repo rate cut will help boost the real estate sector by providing the home buyers an access to home loans at cheaper rates, thereby stimulating demand.

Wave Infratech Executive Director R K Jain said the mid- quarter monetary policy review by RBI is on expected lines and the company expects home loan interest rates to get cheaper, which will help reviving the housing demand in future.

Ramprastha Group Chief Executive Officer Nikhil Jain said: “It will not only help the realtors for fund allocation but also help the people at large in terms of liquidity and lower interest rate.

“As developers, we were waiting for progressive measures from the apex bank to mobilise the liquidity in the market which has been a baited breath for us for long.”

CREDAI disappointed over RBI monetary policy

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india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, RBI, Reserve Bank of India, home loan proceduresTrack2Realty: Expressing disappointment over the RBI’s decision to cut repo rate by “just” 25 basis points, realtors’ apex body CREDAI said the central bank appears to missing opportunities time and again.

“It is high time that we looked at enhancing growth by infusing liquidity and going in for rate cut,” said Lalit Kumar Jain, National President of CREDAI.

CREDAI – the Confederation of Real Estate Developers’ Associations of India – has over 10,000 members across 20 cities pan-India.

Talking about options before the RBI, Jain pointed out that risking inflation for growth is the right economic policy. Inflation could well be curbed by giving a big boost to production and flooding market with supplies. It is not a prudent policy to risk anarchy through a tight monetary policy.

“Judging by the Ministry of Housing’s pragmatic approach towards to the real estate industry, the developer community was hopeful that the RBI too will soften its stand and help the sector revive. But the continued stubborn approach of RBI is shocking,” he said.

Jain said the mid-quarter monetary policy is by and large uneventful since it does not take into consideration of the real estate sector that contributes handsomely to the GDP. “One would have expected RBI to be realistic and appreciate the fact the real estate industry supports hundreds of other industries and hence plays a major role in rejuvenating the economy hit by job losses and dwindling investments,” he said.

RBI should take steps to ease funding for real estate at much lower rates of interest in the interest of millions of home seekers and ease CRR as well, he said.

“We cannot hope to make housing affordable for the masses with such restrictive policies,” Jain added.

Caught between distress sale and debt trap-IV

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india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, RBI, Reserve Bank of India, home loan proceduresTrack2Realty Exclusive-Yearly Analysis: Many of these cash-strapped developers may find it difficult to get bank loans as well. Bank lending is the single largest source of funding for developers, who require funds primarily for construction finance but also to service debt.

“There are new banking norms that check how much equity is there to make sure that the loans are absolutely construction-linked. There are no ad-hoc loan disbursals,” says Goenka.

Traditionally, the Reserve Bank of India (RBI) has taken a cautious approach towards banks’ exposure to the segment, classifying it as sensitive sector along with capital market and commodities in view of the higher risk involved due to price fluctuations.

Loan flow to realtors took a hit following the corporate loan scam in November 2010 when Central Bureau of Investigation (CBI) arrested eight senior officials from banks and financial institutions for violating prudential norms or leaking vital information.

Other than that, the controversy over the allocation of second generation airwaves (2G), which involved a few real estate firms, also made banks more risk-averse.

Real estate and housing finance companies allowed to raise 1bn US dollars from abroad

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india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, RBI, Reserve Bank of India, home loan proceduresTrack2Realty-Agencies: The Reserve Bank of India has allowed real estate developers and housing finance companies to raise funds overseas for low-cost housing projects.

Developers and housing finance companies will be permitted to borrow $1 billion in 2012-13 under the low-cost affordable housing scheme, RBI said in a notification on Monday, Dec 17. The regulator said it will review the borrowing limit every year.

Developers with minimum five years of experience in residential projects and those who have not defaulted in any of their financial commitments to banks or any other agencies will be eligible to raise funds overseas.

The project for which the builder is raising funds should not be involved in any litigation. RBI has also made it mandatory that the project should be in conformity with the provisions of master plan/ development plan of the area.

“The layout should conform to the land use stipulated by the town and country planning department for housing projects,” RBI said. “All necessary clearances from various bodies including revenue department with respect to land usage/environment clearance, etc are available on record.”

Housing finance companies that are registered with the National Housing Bank and have a minimum capital of Rs 50 crore are eligible to raise funds overseas, RBI said. Bad loans of such companies should not exceed 2.5% of the net advances and it should have minimum net owned funds of about Rs 300 crore for the past three years to borrow overseas.

Realty welcomes rate cut with guarded optimism

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By: Ravi Sinha

Track2Realty Exclusive

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, RBI, Reserve Bank of India, home loan proceduresRealty sector has welcomed the the RBI’s decision of slashing the CRR rates by 25 basis points to 4.50% with a guarded optimism. The statement from the Prime Minister’s Economic Advisory Council (PMEAC) that the RBI move to infuse liquidity in the system is “more potent” than a cut in interest rate and it will help banks expand credit portfolio seems to have few takers in the sector.

“I said that CRR is a more potent instrument only because CRR acts on the liquidity base of the commercial banks and therefore, even if an announcement is made on the policy rates the Reserve Bank of India will have to take actions either through Open Market Operations or through other mechanisms to provide liquidity,” Dr Rangarajan said.

He said the RBI recognised certain steps taken by the government and slashed CRR though the cut is not a big reduction. The sector, however, expressed guarded optimism keeping in mind both the need of liquidity in the fund dried market and buyers’ sentiments at the same time.

“The RBI has been constantly keeping a strict watch on the inflation rate that has refused to decrease. Hence, RBI has been very conservative in spurring growth by reducing interest rates and/or increasing capital flows at the cost of increasing the inflation rate. It has been responding to macro-economic concerns through small and measured doses such as increasing the limits for ECB as witnessed recently and now by reducing the CRR rate to infuse Rs. 17,000 crores of capital into the economic system. Given the recent announcements by the Govt to allow FDI in multi-brand retail, airlines, etc. this is another positive sentiment reinforcing move which will enable domestic and international investors to see the country in a more positive light. The expected release of funds into the system should have a multiplier effect and boost various activities in the economy,” says Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield.

“The 25 basis point cut in the cash reserve ratio by the RBI, will definitely aid the improving liquidity situation in the market, both for businesses and consumers. It is anticipated that this marginal cut in CRR will help release addition Rs 17,000 crores of liquidity into the system, thus ensuring better availability of credit. This change in the cash reserve ratio is a statement of direction by the apex bank, where if inflation comes down to within the acceptable limits, easing interest rates can be expected in the future,” says Sachin Sandhir, MD-RICS South Asia.

“The RBI’s decision to cut Cash reserve ratio (CRR) is a step in the right direction. This move will allow banks to disburse monies in the sagging market. I hope this also has a positive impact on the real estate sector and the  developers find it easier to gain access to funds and that too at lower rates. Also, home loans might get cheaper. Thus, it could provide encouragement to the  real estate sector in the country,” says Anshuman Magazine, Chairman & Managing Director – CBRE South Asia.

MCHI-CREDAI also appreciated the move by RBI on their decision of slashing the CRR rates by 25 basis points to 4.50%. “This step will infuse more liquidity into the sagging markets, benefiting the real estate sector to a great extent. Now, we expect banks to cut down the interest rates so that there is an upward trend in demand for real estate. With the festival season around the corner, the rate cut will benefit home buyers, who will be able to go ahead with their purchases in the real estate sector. So, MCHI-CREDAI believes that this is a positive step by the RBI, it will benefit all the Sectors,” said MCHI-CREDAI in a statement.

Experts believe given the fact that the mortgage or home loan interest rates have increased over the last financial year, in tandem with increasing policy rates as a counter measure of rising inflation – the marginal cut in the cash reserve ratio is indicative of expected on-going decline in home loan interest rates. However, how soon these rate cuts will take place will depend on various factors that influence RBI policy such as inflationary pressures, fiscal deficit limits etc.

Realtors ring alarm bells post RBI status quo on rates

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india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, RBI, Reserve Bank of India, home loan proceduresAnticipating a significant rate cut by the RBI, disappointed real estate community has ring alarm bells and forecast more slump due to the high interest rate regime. Pointing out that the capital and labour intensive sector plays a key role in employment generation and accelerating growth, industry body CREDAI says the government has also been losers of revenue due to neglect of the sector and risks attributed to real estate and the RBI advisories against lending to real estate have only harmed the sector and made housing costlier for consumers, apart from affecting the economy.

CREDAI National President Lalit Kumar Jain has categorically expressed his disappointment at the RBI maintaining status quo in its credit policy. “RBI appears to be sadly ignorant of the importance of real estate sector in the national economy and GDP. The status quo on interest rates will further dampen the sentiment though RBI may justify its action. “I hope further policies will see rate cuts positively and conservatism does not become a lasting attitude,” says Jain.

Sanjay Dutt – Executive Managing Director, South Asia, Cushman & Wakefield, says from the point of the real estate sector, a further rate cut would have resulted in positively influencing the sentiments within the sector. However, reduced CRR and Repo/Reverse rate cuts do not automatically translate into reduced interest rates for mortgages, which would have pushed the sales volumes in the residential section up higher.

“Banks have to take into account other factors before deciding on lowering their interest rates for retail customers. For developers, in any case, financing options from the banking industry have been restricted since some time and they have had to mainly depend on other sources such as ECBs and PE investments. Hence, they will mostly remain in a status quo. The main concern for both buyers and developers is related to the inflationary trends that still persist in the economy, as their finances get impacted on a much bigger level. Our outlook for the sector remains cautious, but still positive as there are transactions still taking place at a sustainable pace and volume,” says Dutt.

Gaurav Mittal, Governing Council Member, CREDAI and Managing Director, CHD Developers rues that the RBI has taken a cautious stance by keeping the repo rate and the CRR unchanged. “The step has been taken owing to the strong inflationary pressures. However, considering the plight of the productive sector and the lack of funds, especially in the real estate sector, a rate cut would have been a boon and fuelled growth.  RBI must take cognizance of this fact and we hope for a rate cut in the next policy to induce more liquidity in the market,” he says.

“There was this expectation that some policy action would come in the light of slower growth. There were expectations that both the repo rate and CRR (cash reserve ratio) would be cut. It was disappointing to that extent,” says Ashok Tyagi, Group Chief Financial Officer, DLF.

Paras Gundecha President of MCHI also expressed his disappointment at the RBI maintaining status quo in its credit policy. “It seems the RBI is undermining the importance of real estate sector in India’s economy and GDP. The real estate sector plays a vital role in generating employment opportunities and accelerating the growth of the nation. Being the financial hub of the country, the real estate sector in Mumbai will be negatively impacted by RBI’s status quo on credit policy,” he says.

RBI asks banks not to overstate value of realty

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india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, RBI, Reserve Bank of India, home loan proceduresThe Reserve Bank of India (RBI) on Friday came hard on banks for overstating realisable value of real estate properties they finance by including charges such as stamp duty and other levies. The RBI said the banks should not include these charges in the cost of the housing property they finance so that the effectiveness of loan to value (LTV) norms are not diluted.

“It has been brought to our notice that banks adopt different practices for deciding the value of the house property while sanctioning housing loans. Some banks include stamp duty, registration and other documentation charges in the cost of the house property,” the RBI said in a circular.

The RBI had in 2010 issued guidelines directing the lenders to provide loans only up to 80 % of the cost of property.

As per the rule, a homebuyer will have to arrange at least 20% of the property value on his own before seeking loan from a bank.

Rise in loans to real estate, retail disproportionate

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india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, RBI, Reserve Bank of India, home loan proceduresThe Reserve Bank of India (RBI) has pointed out banks’ disproportionate growth in loans to the commercial real estate sector, the retail segment and the infrastructure sector. Banks have also been found lending heavily to non-banking financial companies (NBFCs).

The Apex Bank, however, said there was no evidence of a credit boom in the economy, and that continuous monitoring was required for these sectors as the trend may lead to asset-liability mismatches.

“There were emerging concerns about banking sector stability related to disproportionate growth in credit to sectors such as real estate, infrastructure, NBFCs and the retail segment, persistent asset-liability mismatches, higher provisioning requirement and the reliance on short-term borrowings to fund asset growth,” the RBI said in the Report on Trend and Progress of Banking in India 2010-11.

Bank credit to NBFCs saw 50 per cent growth in 2010-11, compared to the previous year. Loans to the infrastructure sector may moderate, though, since the growth was mainly due to telecom players participating in 3G spectrum auctions. According to RBI data, credit growth to NBFCs on a year-on-year basis in September stood at 46.2 per cent, significantly higher than 18.5 per cent in the previous year, while loan growth to the commercial real estate sector rose 12.6 per cent in September, compared with 7.9 per cent in the previous year.

The data also showed personal loans, or retail loans, increased by 15.2 per cent on an annual basis in September, compared with 8.6 per cent growth in the previous year. Most types of personal loans, such as housing, advances against fixed deposits, advances against shares, bonds and vehicle loans, registered accelerated growth.

“Growth in infrastructure and personal loans raises risks to the banking sector, as these loans may raise asset-liability mismatches. For the same reason, the growth pick-up in commercial real estate loans also deserves attention,” RBI said.

The central bank also said for financial stability, trends that may warrant immediate attention included the possibility of spillovers from increasing financialisation of commodities to financial markets and the interest rate differential, compared to the advanced economies. That could propel funding by the Indian corporate sector, leading to currency mismatches. The RBI also said the rollover risk of maturity of foreign currency convertible bonds may be an issue in need of attention.

RBI rate hikes further dampens Diwali sentiments of realty sector

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By: Ravi Sinha

india realty news, india real estate news, real estate news india, realty news india, india property news, property news india, india news, property news, real estate news, India Property, RBI, Reserve Bank of India, home loan proceduresIn a further blow to the dampened Diwali spirit of the realty sector the Reserve bank of India (RBI) raised interest rates on today, October 25, for the 13th time since early 2010 but said it was likely to hold off on further increases as it expects high inflation to ease beginning in December.

The RBI raised interest rates by a quarter of a percentage point to combat near double-digit inflation, despite signs of slackening growth. The RBI has also reduced GDP growth projection to 7.6 % from 8 % in 2011-12.

The RBI has predicted that the inflation will fall from December; pegged it at 7 % by March end.

The real estate sector has reacted sharply to the rate hike calling it Black Diwali. Babulal Varma, Managing Director, Omkar Realtors & Developers says the rising inflation, the rise in interest rate and the global economy slowdown has already taken a toll on the real-estate sector. Any further rise in interest rate will further cripple the sector.

“As per urbanization report, there is a major shortage of apartments which are required in urban areas in India. Still one can notice that there has been a 20 to 25% decline in registration in Mumbai alone. The transactions have slowed down. The rise in interest rates increases the cost of capital for the developer and for the buyer. Thus it is a double burden on the end user as the developer also has to pass on the cost to the end user,” says Varma.

Realtors assert when transactions slow down and the cost of capital increases, developers have no choice but to differ plans to launch new projects. As real-estate projects have a two to three years construction cycle, the impact of such policies has not just a short term but a long term impact on the overall market scenario.

Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India, says the economy is showing signs of decelerated GDP growth, and inflation has not abated despite the flurry of interest rate hikes. “Real estate developers are facing high debt, and were looking forward to the festival season for sales to improve. However, the spate of increases in home loan interest rates will dampen sales even further. Buyer sentiments on the residential market will remain somber for now, and the absorption rate will remain low. This is indubitably a buyer’s market now, and investor activity in residential real estate will decrease further. New launches will decline, as will growth in capital values. In a normal scheme of things, the current scenario would hasten a correction in metropolitan cities where residential markets have slowed down due to overly high product costs. However, developers are facing a considerable liquidity crunch due to high cost of borrowing compounded by slow sales. The RBI may want to rethink its seemingly one-dimensional strategy to combat inflation. The high costs of construction that are resulting from it are not helping anyone, because developers have little option but to pass on the bulk of the additional burden to buyers,” he says.

The repo rate hike by RBI comes as a dampener of the Diwali festive spirit, according to Lalit Kumar Jain, National President of Confederation of Real Estate Developers’ Associations of India (CREDAI).

“As we have been saying the rate hikes coming very frequently will prove to be counterproductive since the move will have a cost-push impact rather than proving to be an inflation control measure. The rates of interest are bound to zoom and this will further weaken the sluggish demand in real estate sector, he pointed out,” says Jain.

CREDAI has called for immediate steps for initiating reforms in real estate like transparency, quick clearances, single window system for clearing building permissions and rationalization of land and even registration policy for which CREDAI has been campaigning.

Meanwhile, RICS (Royal Institution of Chartered Surveyors) in a statement says even with the rate hike, the residential real estate sector is likely to remain relatively resilient in the face of more moderate pace of economic growth and the higher cost of borrowing. The JLL REIS third quarter numbers for the top seven metros indicate prices are broadly stable at recent highs and activity levels also essentially flat. Also, in spite of the relatively high cost of borrowing the credit growth for housing continues to post strong year-on-year gains.

“However, there are a few signs that confidence, particularly amongst developers, may be slipping with a marginal drop in the number of new launches (30.3k units as compared to a four quarter average of 44.4k). In the case of commercial real estate, particularly office space, even though economic growth projections have slowed down to 7% – 7.5%, demand is likely to remain firm, helping underpin rental growth. However, the rate revisions may result in these trends moderating over the course of the coming months,” the statement says.

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