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The Real Estate sector in India, represented by the apex body Credai, expressed disappointment over the Reserve Bank of India's (RBI) decision to maintain the key interest rate unchanged at 6.5%. Credai believes that a rate cut during the festive season would have provided a significant boost to housing demand and contributed to a much-needed revival of the industry. While the RBI softened its stance to 'neutral' from 'hawkish', signifying a potential shift towards rate cuts in the future, Credai argues that this move arrived too late for the festive season, a crucial period for stimulating consumer spending.
Credai National President Boman Irani articulated the organization's perspective, stating that the unchanged repo rate, despite the revised neutral stance, represents a missed opportunity, especially with the festive season approaching. A rate cut at this juncture, according to Irani, would have been instrumental in accelerating consumer demand across various industries, including real estate. The organization remains hopeful that the central bank will consider a rate reduction in the next quarter, aiming to capitalize on the festive season's potential to invigorate the economy.
Echoing Credai's sentiment, Naredco President G Hari Babu also advocated for a rate cut in the subsequent Monetary Policy Committee (MPC) meeting. He emphasized that a reduction in interest rates would stimulate economic growth, bolster housing demand, and encourage investment in the real estate sector. This perspective aligns with the broader view that lower interest rates can create a more favorable environment for real estate transactions, ultimately contributing to the overall economic well-being of the nation.
The real estate sector, a significant contributor to the Indian economy, is keenly watching the RBI's future monetary policy decisions. The industry's hopes for a rate cut, aimed at stimulating housing demand and encouraging investment, hinge on the central bank's assessment of inflationary pressures and its willingness to prioritize economic growth.
Source: RBI misses opportunity to boost housing demand by keeping repo rate unchanged: Credai