Thursday, July 24, 2025
  • Home
  • About us
  • Privacy policy
  • Advertise with us
  • Contact us
Fii News Logo
No Result
View All Result
  • Tenders
  • Projects
  • Markets
  • Manufacturing
  • Investment
  • Technology
  • Exports
Newsletter
  • Tenders
  • Projects
  • Markets
  • Manufacturing
  • Investment
  • Technology
  • Exports
Fiinews
No Result
View All Result
Home Banking & Finance

Repo Rate Cut of 25 bps – A Notional Nudge

Fiinews by Fiinews
January 15, 2020
in Banking & Finance, Economy, Investment, Projects
Reading Time: 2 mins read
A A
0
29
0
SHARES
10
VIEWS
LinkedinShare on Twitter

0:00

Much depends on how home buyers benefit

Canara Bank

The repo rate cut of 25 bps to 5.15% announced on 4 Oct 201 is in line with expectations and can probably go some way in improving consumer sentiments ahead of the festive season, which is a crucial quarter for the real estate sales, writes Anuj Puri, Chairman – ANAROCK Property Consultants.

Considering that the Aug 2019 CPI came in at 3.21% – well below the medium-term target of 4% – RBI had room for such a rate cut.

However, much depends on how efficiently banks transmit the benefits to their homebuying borrowers.

An efficient transmission will lower the cost of capital not only for consumers but also for developers, making room for price revisions and further discounts.

Some banks have agreed to link their lending rates to the Repo rates, but all major lending institutions need to follow suit.

Importantly, this rate cut comes close on the heels of the recent announcement of setting up a stress fund of Rs.20,000 crore to provide last-mile funding to projects stalled due to lack of capital.

This fund needs to get into action soon and demonstrate meaningful results to improve the sentiments of industry stakeholders like FIs, PEs, developers – and most importantly, homebuyers.

An announcement regarding the real-time deployment of the stress fund during the festive season can dovetail well with this rate cut and yield a positive consumer response.

There’s still a dire need to do more for affordable-to-mid housing (units priced less than Rs.80 Lakh) as nearly 68% of unsold inventory lies in this segment.

This is where the ‘real’ end-user demand is and affordable housing definitely needs additional measures such as extending the moratorium period on home loans, subsidies, additional tax benefits, and a revision of the definition of affordable housing.

On a macro level, the overall stress that Indian real estate is in cannot be remedied merely by reduced lending rates – the sector has been reeling under subdued demand for many years.

Even if we ignore the euphoric pre-2010 era, new housing project launches in 2018 across top 7 cities were 64% below the previous peak of 2014. Likewise, sales were down by 28%.

The sector is currently still saddled with 6.56 lakh unsold housing units (as of Q3 2019) across the top 7 cities, and developers are struggling to raise funds to complete projects and launch new ones.

In the April-June 2019 quarter, India’s GDP grew only by 5% – the slowest pace in over six years. Consumers were spending less on everything from FMCG to automobiles – and, of course, real estate. Naturally, the sector eyes RBI’s monetary policy for cuts in the key lending rates to support the various measures taken by the government to boost consumption sentiment. fiinews.com

Tags: ANAROCK Property ConsultantsReserve Bank of India
ShareTweetShare

Related Posts

Isro
Projects

Project: Space should be broader development

by Fiinews
July 24, 2025
0
12

Promote Innovation-space-tech convergence, says Minister Space sector should be seen as a catalyst for broader sectoral development, not as a...

Florida Tech Stem University
Projects

Project: NIFT collaborates with 22 institutions

by Fiinews
July 24, 2025
0
24

International engagements enhance India's textile sector The National Institution of Fashion Technology (NIFT) has established formal collaborations with over 22...

PIB

Project: NGOPV keel-laid at MDL

July 24, 2025
19
Hindustan Zinc

Project: Hindustan Zinc’s Phase I approved

July 23, 2025
13
PIB

Project: SAIL supplied 31,000+t steel to Zojila

July 23, 2025
12
JGU

Project: MJIAS to work on India-US ties

July 22, 2025
13
SBI YONO

POPULAR NEWS

  • Cristina Dnv

    Projects: Indian yards set to build green ships, says DNV expert

    0 shares
    Share 0 Tweet 0
  • Market: Indian-origin UGF scales heritage consumer brands globally

    0 shares
    Share 0 Tweet 0
  • Technologies: Royal Diamond sponsors aerspace Industries’ drones in UAE

    0 shares
    Share 0 Tweet 0
  • Investments: Foreign investors see India as long-term destination for fund placings

    0 shares
    Share 0 Tweet 0
  • Markets: Blue Dart maintains positive outlook on India

    0 shares
    Share 0 Tweet 0

Fiinews.com features through news articles on business opportunities in the Indian market for the benefits of foreigners. It is also a platform for international businesses to showcase through elaborate articles on their products & services to the Indian consumers and corporations exploiting industrialisation of the country.

7Clicks Media is a Singapore based Media & PR company offering over 100,000
impressions via our targeted communication strategy.

It is led by editor-in-chief Gurdip Singh who has worked over 45 years reporting on
Asian businesses.

Recent News

  • Project: Space should be broader development
  • Market: Agrawal to lead Comviva 2.0 journey
  • Market: Infosys updates on business deals
  • Market: Dr Reddy’s bullish on global prospects
  • Tech: Tata-AWS work on AI adoption in India

Pages

  • About US
  • ADVERTISE ON FIINEWS.COM
  • CONTACT US
  • EVENTS
  • FII-NEWS.COM PDF ARCHIVE
  • Home
  • News
  • PRIVACY POLICY

Subscribe to Newsletter

  • About
  • Advertise
  • Careers
  • Contact us

© 2024 FIINEWS - Design and developed by 7clicksmedia.

No Result
View All Result
  • Tenders
  • Projects
  • Markets
  • Manufacturing
  • Investment
  • Technology
  • Exports

© 2024 FIINEWS - Design and developed by 7clicksmedia.