The entire nation is perplexed with the mystery of old and new currency and RBI still, decides to keep the rates undeterred in its fifth bi-monthly policy review for the year. This comes as a big blow for the real estate market which is in a desperate need of a rate cut as the market has taken a steep fall. This was the last policy review for the current calendar year, the first one took place before demonetisation era and the second review was presented by Dr. Urjit Patel. Real estate had high hopes with this policy review session as a repo rate deduction was witnessed last time, but the hopes got shattered with the RBI’s verdict. The secondary real estate market has taken a hard hit and the entire responsibility to keep the realty sector alive is on the primary market. A rate cut at this scenario would have been a great asset for the market to revive. The last ray of hope is the parcel of benefits of previous rate cuts to the consumers which is yet to be delivered by the banks.
With the recent announcement in the monetary policy review, the Repo Rate remains unchanged at 6.25 percent, Reverse Repo Rate under the LAF at 5.75 percent, Statutory Liquidity Ratio (SLR) at 21.5 percent, and Cash Reserve Ratio (CRR) at 4 percent and Marginal Standing Facility (MSF) at 6.75 percent respectively. With no change in the monetary policy review, the realty experts are predicting the graph to stay uniform while giving the real power in the hands of end users. Investors markets stand midway with no return guarantee. With the present situation of prices being at their very least, country going cashless on high value currency, there are not many signs of appreciation in the upcoming 6-9 months.
Here is what Avneesh Sood, Director, Eros Group would like to say about this subject:
Since demonetisation, it was quite evident that real buyers will become prominent in the market and end users will be in majority. Banks had already reduced their interest rates, post the previous policy review; and a rate cut in today’s policy review would have further motivated these potential primary buyers to make full use of the reduced EMIs. With ready to move in properties high in demand, property prices already at its lowest, a rate cut at this point of time could have pushed the sales further; either for long term retention or end use.