Real estate industry hails RBI's rate cut decision, urges banks to pass on benefits to homebuyers

"The unanimous vote reflects the resolve of the Monetary Policy Committee (MPC) to act decisively and act in time," RBI Governor Shaktikanta Das said in a press conference after the policy announcement.

The rate cut comes as a big relief for homebuyers as home loans are expected to get cheaper soon, which in turn, comes as a major boost to the rate-sensitive real estate sector.

"We are happy with the rate cut. Buyers who are coming back after the GST rate cut announcement on under-construction and affordable properties would be encouraged further with the reduction in the bank rates," said Niranjan Hiranandani, NAREDCO president and senior vice-president of ASSOCHAM.

He, however, feels "more needs to be done to address the issue of liquidity."

While Manju Yagnik, vice chairperson, Nahar Group, said, "The stance change from 'neutral' to 'accommodative' by RBI will boost consumption and assist in regular cash flow in the market."

The third consecutive rate cut in addition to lower GST and tax rebate for income up to Rs 6.5 lakhs for the middle class is likely to encourage homebuyers further, leading to an immediate increase in the growth of realty sector, according to Ashok Mohanani, chairman EKTA World.

However, all this will materialise given that the banks reduce the lending rates and ensure that the borrowers get the benefits of the move.

"Banks should reduce the lending rates and ensure that the home loan borrowers reap the benefits of this move. This would enable the borrowing to come down and make it more convenient for homebuyers to purchase their dream homes," said, Farshid Cooper, MD, Spenta Corporation.

Parth Mehta, managing director, Paradigm Realty said that while the rate cut would create a positive ecosystem and stimulate the growth dynamics, the central bank is expected to take more actions on the liquidity front.

While the sector seems positive, it is to be seen how much growth does it witness by the move.