RBI Surprises With a Repo Rate Cut
In another surprise move the Reserve Bank of India (RBI) has announced a second rate cut of 25 basis point cut in its benchmark interest rates, outside the regular policy review. The reduction in repo rates will accelerate the downward movement of deposit rates which translates into lower rates for borrowers. The banks which did not revise their benchmark base rates during the last rate cut announcement are expected to do so now. Experts feel that this move would give a positive signal that RBI is now focused on growth, as the inflation was finally under control. The RBI's repo rate now stands reduced to 7.5% from 7.75% earlier.
The move brings cheers to real estate sector and MakaanIQ brings forward the sentiments of some major realty developers.
According to Mr. Manoj Gaur, MD, Gaursons India ltd & President CREDAI Western UP: "It is a surprise gift by RBI to the home loan seekers in India. Now we are waiting for the banks to cut down a bit on home loan interest rates so that buyers can get lower EMIs. This step the second in three months reflects that the government is gradually working towards providing housing for all"
Mr. P Sahel, Vice Chairman, Lotus Greens Developers: “The sudden decision by the Reserve Bank of India to slash the repo rate by 25 bps points to 7.5% from existing 7.75% post the Union Budget came as a pleasant surprise. We believe that the financial institutions will now be able to reduce home loan rates which will encourage prospective home buyers in speeding up the buying decisions. At the time when government is auguring a double digit GDP growth, this development is poised to act as a catalyst for creating positive impact on the overall realty sector.”
Mr Santosh Shetty, Chairman and Managing Director, Expat Group: "This post-budget rate cut once again promises good things for home buyers. The banks were expected to lower home loan interest rates in January with the first repo rate cut but most banks failed to pass on the benefits to the consumers. However, this time the outlook is especially positive, with the State Bank of India promising to take the appropriate call in response to the RBI’s move. This could lead to a domino effect with the other banks. In a way this will make up for the lack of focus on home loans in the Union Budget 2015 and will ease the burden on potential mid-income home buyers slightly. With the likely decrease in home loan interest rates coupled with the union government’s push for affordable housing, home buyers should be scouting for properties to invest in, particularly on the high growth areas outside major cities.”