Realty firms see liquidity improving, demand boost over RBI rate cut

The rate cut announcement by the Reserve Bank of India will boost housing demand and improve the liquidity conditions of real estate companies, said property developers and consultants.

"The 75 basis points’ cut (in repo rate) would give a big boost to credit appetite among new home buyers. The moratorium of three months on term loans, including home loans, would provide relief and enable real estate companies to focus more on the operational requirement and recalibrate their business strategies," said Kamal Khetan, chairman at Mumbai-based Sunteck Realty.

Sanjay Dutt, managing director at Tata Realty & Infrastructure, said the new announcements would help lift home buyer sentiment, kick-starting the demand cycle for mid-range homes and in affordable housing.

"With the stock market witnessing a lot of fluctuation in these times of uncertainty, we anticipate that a lot of people will consider investing in property, as that is a more stable, long-term  asset," he said.

Realty developers have been battling lower sales and tight liquidity for some years. The liquidity crunch since September 2018 at non-bank finnancial compnaies has severely hit their refinancing arrangements.

Ashish R Puravankara, managing director at Bengaluru-based Puravankara, said: “With no registrations and no visibility now on new launches, this (rate cut) will help with cash flow management and better allocation of resources once the lockdown is over."

Home sales and launches are down by 42 per cent each in the first quarter of the current calender year, due to the lockdown, according to a recent report from Anarock Property Consultants.