The Confederation of Real Estate Developers' Association of India (CREDAI) on Tuesday expressed its disappointment at the central bank's decision to maintain status quo on key rates at a time when inflation is under control.
In a statement, CREDAI said it advocated a reduction in interest rates to facilitate lowering of entry barriers and spur demand for the real estate sector and free home loan interest rates from inflation expectations.
"The RBI's (Reserve Bank of India) decision to keep the key rates unchanged will not help the real estate sector development. Presently the overall inflation is under control as expected by the RBI, the crude oil prices are also low, the overall business requires an upward momentum," CREDAI president C.Shekar Reddy, president was quoted as saying in the statement.
According to him, a reduction in policy rates at this juncture would have a significant impact in boosting the industry and facilitating growth.
"The RBI's status quo stance was largely expected by the industry, despite GDP (gross domestic product) growth slumping to 5.3 per cent in the September quarter. To meet its long-term target of reining in inflation, the central bank has exercised caution on paring interest rates," Anshuman Magazine, chairman and managing director, CBRE South Asia said in a statement.
As for the real estate industry, the move may be seen as a lost opportunity as a rate cut at this juncture could have been the trigger for housing sales, Magazine said.
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