CREDAI unhappy at no change in RBI rates

Hyderabad, Feb 3 (INN): The Confederation of Real Estate Developers' Associations of India (CREDAI), the apex body for private real estate developers in India, expressed its unhappiness over the status quo on the repo rates contrary to the expectation that the reversal in hawkish stand by RBI would be followed by a consistent policy of rate reduction. CREDAI welcomed the move to reduce the SLR rates by 50 bps which would place more funds in the hands of the private sector for lending.

Speaking on the development CREDAI National President C Shekar Reddy said, "Considering the overall economic situation and challenges being faced by the industry, we were hopeful that the RBI would continue the initiative taken in January with a further reduction in policy rates.

The home buyers are upbeat but in a wait and watch mode due to high prevailing interest rates, a further reduction in rates now would have forced the financial institutions to pass the benefit to the end user, which in turn would make people take the decision."

However, he said that the CREDAI was happy that RBI has increased the liquidity in the system by reducing the SRL by 50 bps. "We are hopeful that with the increased liquidity the banks and financial institution will fund liberally to the real estate sector and pass on the benefits to the end user, which will trigger the demand and increase the off-take of housing.

We are hopeful that keeping in view, the low inflation RBI will continue the change of stance in the monetary policy and address the industry concerns for growth and reduce the rates post the budget,' he said.

Shekhar Reddy further added, 'There is an expected total housing requirement of 60 million units by 2030 in India, 95% of which is in the affordable housing segment.

A reduction in rates and increased funding to developers and end users in this segment is the need of the hour, to achieve the mission 'Housing for All'.

He said that in order to meet the future requirement for housing, the industry expects the government to announce the much awaited interest subvention scheme to increase the eligibility of home buyer and come out with more incentives like infrastructure status to the real estate sector to allow liberal and easy funding at lower rates of interest, concessions from direct indirect taxes and waiver of service tax for affordable housing in the upcoming budget.