Realtors want banks to pass on benefit of rate cut to customers; demand one-time debt restructuring

Real estate developers on Friday welcomed cut in key interest rates but said the RBI needs to take more steps, such as one-time debt restructuring of builders loan, to provide relief to the industry which has been hit badly by the lockdown.

The RBI needs to ensure that banks pass on the benefits to customers, they said. The industry hailed the extension in the moratorium on loan repayment but felt it was not enough.

"The advantages extended by the RBI through reducing the repo rates are not being passed on by the banks to the customers. The series of reduction in policy rates will help all sectors including real estate which is hit by the contraction in demand and liquidity squeeze caused by the COVID 19.

" However, we are hoping for quick transmission of these actions in banks' respective lending rates," CREDAI National Chairman Jaxay Shah said.

"We expected more stringent measures from the RBI to revive the economy. Real Estate sector can act as a catalyst in resurrecting the economy, backed by stringent fiscal and non-fiscal measures. The move of moratorium extension is a short term piecemeal solution to a long term problem," CREDAI President Satish Magar said in a statement.

Naredco President Niranjan Hiranandani said the reduction in repo rate and extension of moratorium period were steps in the right direction.

"Industry though awaits one-time debt restructuring as a holistic measure to give a breather to the industries across the board and help in its quick revival," he added.

Tata Realty and Infrastructure Managing Director (MD) and Chief Executive Officer (CEO) Sanjay Dutt said this will provide some financial relief to borrowers with their equated monthly instalments (EMIs) and make it cheaper to take new loans.

Sobha Vice Chairman and MD J C Sharma said: "This will further lower the home loan interest rates. Such lowest ever, most lucrative reduced EMIs will augur well for the market sentiments and the larger economy. This will induce demand for homes and will give the much-needed fillip to the current state of the economy."
Puravankara Ltd MD Ashish Puravankara said: "The further reduction of the repo rate will aid in ensuring adequate flow of capital in the market. We hope that all banks will incorporate the new announcements and pass down the benefits to loan seekers."
Anshuman Magazine, chairman and CEO - India, South East Asia, Middle East & Africa, CBRE, said: "The RBI's move to cut repo rate will have a positive effect on the residential property market. This is a clear step towards reducing lending rates, encouraging liquidity, preserving financial stability and supporting overall economic growth."
Savills India CEO said the lowering of the rates may help accelerate the decisions of a section of home buyers, in the next few months, if not immediately. "It will also help in reducing the EMI burden of customers during such grave times, provided the banks pass down the rates."
Signature Global Chairman Pradeep Aggarwal said: "Now the situation for homebuyers might improve further as home loan interest rates are expected to come down further. Affordable housing will benefit the most as the buyers of this segment are very particular about the EMIs."