Realtors Unhappy With RBI’s Decision to Keep Policy Rates Unchanged

On 15th March, real-estate developers were very disappointed with RBI’s decision to keep key policy rates unchanged. These realtors sought for cut in interest rate to boost the housing demand. The Chairman of Confederation of Real Estate Developers’ Association of India (CREDAI) said that economic condition is getting worse day-by-day and RBI should consider the need for reducing the cost of funds.

The chairman of association expected that RBI would come out with a temporary relief in the form of cut in interest rates to reduce the cost of funds for both real-estate developers and home buyers. But RBI has broken the hopes of many people by keeping the repo rate and reverse repo rate unchanged at 8.5% and 7.5% respectively. The sharp increase in repo rates has affected the housing demand from last two years. Both sales and net-profits of developers have gone down as the interest rates have increased significantly.

An official from RBI said that the recent growth in inflation has prompted the central bank to keep policy rates unchanged and moreover, their future actions are towards lowering the rates. Thus, it has declared that inflation rates will influence both the timing and magnitude of future rate actions.