Mumbai : Reserve Bank Governor Raghuram Rajan exhorted realty developers stuck with high inventories to cut their rates even as the country’s largest lender SBI sought RBI’s nod for cutting home loan rates.
“I do believe that if real estate developers who are sitting on unsold stocks bring down prices, that will be a very great help to the sector because once there is a sense that prices have stabilised, more people will be willing to buy,” Rajan said at the second SBI economics and banking conference.
SBI Chairperson Arundhati Bhattacharya said that the realty stock is at a two-year high and sought to lend below the base rate, saying a similar move had helped the economy following the 2008 financial crisis.
“I was thinking if it is possible for a little while could something of this (lower rates loan) kind could be allowed given the fact that this is one of the portfolio where NPAs are the lowest,” Bhattacharya said, giving details of the past experience and how even the Economic Survey had congratulated it for the scheme.
While responding to Bhattacharya’s request, Rajan said that he does not have any data yet on the geographical pockets where the inventory levels are high.
“I never say no to your ideas. We will have to look into it,” Rajan said was quick to quip.
According to a report by property brokerage Knight Frank, over 7 lakh housing units remain unsold in eight major cities and it will take more than three years to exhaust the inventories.
