Hiking repo rate adds to developers' woes: Credai

Says industry is already grappling with very high interest rates

The Confederation of Real Estate Developers’ Associations of India (Credai), the apex body of private real estate developers in the country, has stated the RBI's decision to increase the repo rate by 25 bps in the second-quarter monetary policy review was "only aimed at its inflation-fighting credentials despite the country's sputtering economic growth and weak investment demand."
 
According  Credai national president C Shekar Reddy, the continuation of the policy to increase repo rates to control inflation will further increase the problems of the developers who are grappling with high interest rates.  

"We were hopeful that besides easing the liquidity, the RBI will start addressing the industry concerns for growth and give the necessary impetus,” Reddy stated in a press release here on Tuesday.

He said the RBI should consider increasing banks' exposure to the commercial real estate (CRE) segment from 3 per cent to at least 12 per cent so as to encourage funding  of real estate projects in Tier I, II and III cities. Such initiatives will facilitate the flow of formal credit to the sector and  encourage the developers to take up more projects in the affordable housing segment.

"We are keen on meeting the RBI governor to discuss the concerns of the real estate sector”, he added.