Mumbai: Amid the present economic downturn and growing cases of coronavirus pandemic, the ailing realty sector expects ache din with the onset of festive season following RBI's slew of announcements today. The realty players have hailed RBI's decision to rationalise risk weights to all new housing loans until March 2022 would give a fillip to housing loan growth. Further, the Central Bank has also extended the scheme for co-lending to all NBFCs and HFCs which is expected to ease credit availability for the real estate sector.
Knight Frank India CMD Shishir Baijal said broadly these are positive and welcome steps by RBI. ‘’Today’s announcement by the Reserve Bank of India (RBI) to maintain status quo was on expected lines, especially as inflation rates have remained higher than RBI’s target levels. There is optimism in the governor’s statement who is expecting a revival of the Indian economy earlier than expected by most. We echo the RBI sentiments of an early and measured recovery of the economy. The growth in the economy has also been reflected in the real estate activities of the last quarter where both residential as well as commercial markets have seen a sharp increase in activities,’’ he noted.
NAREDCO President Dr Niranjan Hiranandani said RBI’s decision to rationalise the risk weights on home loans and link them to loan to value ratios only will give a boost to the real estate sector as well. “Particularly this step would benefit borrowers of higher value loans. It would ensure that more credit is available to borrowers. This move is a much appreciated step recognising the role of the real estate sector in generating employment and economic activity,” he added.
Dr Hiranandani observed that the RBI has through its proactive measures taken honest efforts to provide access to easier credit to smaller businesses. ‘’However, we believe further steps would be needed to revive the economy,” he said.
ANAROCK CMD Anuj Puri said with real estate demand gradually seeing some green shoots of revival, especially in the wake of reduced stamp duty charges (in Maharashtra) and developers discounts and freebies, reduced repo rates would have given an added boost just before the upcoming festive season. But with consumer inflation still trending at the upper end of the apex bank’s band, and the policy repo rate also being substantially reduced by 140 basis points in 2020, today’s move was expected.
‘’On a positive note, RBI’s move to rationalize risk weightage on home loans and linking housing loans risks only to loan-to-value is a welcome move. This announcement thus will definitely encourage banks to lend more to individual homebuyers without feeling the stress on their balance sheets,’’ he opined.
According to CREDAI National President Satish Magar, now that RBI has recognised the realty sector as the largest employer, it should also announce steps that are imperative and crucial for its revival and then introduce measures. ‘’The move to extend the co-lending scheme to NBFCs and HFCs may infuse additional liquidity, however, we feel the strict due diligence norms and eligibility criteria will not benefit the realty sector. But linking of housing loans to LTR is a welcome step and may play a significant role in boosting demand in the affordable housing segment,’’ he viewed.
Meanwhile, CII Director General Chandrajit Banerjee said the additional measures announced by RBI to support growth in the form of liquidity support, reviving exports, credit support, and improving ease of doing business, are expected to give the much needed impetus to drive the three speed recovery which the Central Bank expects.