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Here are some reactions of realtors on RBI’s policy outcome on realty sector

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The Reserve Bank of India on Wednesday raised the key lending rate or repo rate by 50 basis points to 4.9 per cent to tame rising inflation, which has been now above the central bank’s 6 per cent tolerance level for four months in a row.

Repo rate is the rate at which the central bank lends short-term funds to banks.

In line with the rate hike by the RBI, some banks and non-banking finance companies too had raised their lending rates, which will essentially lead to an increase in EMIs for borrowers.

On Wednesday, RBI decided to increase the existing limits on individual housing loans by cooperative banks.

Accordingly, the limits for Tier I or Tier II urban cooperative banks shall stand revised from Rs 30 lakh or Rs 70 lakh to Rs 60 lakh or Rs 140 lakh, respectively, which essentially means doubling of the limit.

The increased limits will apply for Primary (Urban) Co-operative Banks (UCBs), and Rural Cooperative Banks (RCBs) — State Cooperative Banks and District Central Cooperative Banks.

For RCBs, the limits will increase from Rs 20 lakh to Rs 50 lakh for such banks with assessed net worth less than Rs 100 crore; and from Rs 30 lakh to Rs 75 lakh for other such RCBs.

Besides, considering the growing need for affordable housing and to realise their potential in providing credit facilities to the housing sector, the RBI decided to allow State Co-operative Banks (StCBs) and District Central Co-operative Banks to extend finance to Commercial Real Estate – Residential Housing (CRE-RH) within the existing aggregate housing finance limit of 5 per cent of their total assets.

Following are some of the reactions from real estate experts and developers on the RBI’s measures:

Rohan Pawar, CEO of Pinnacle Group said, during the pandemic, the low interest rate regime had boosted the housing demand, and RBI’s decision to hike the interest rate again by 50 basis points to 4.90 per cent was expected to tackle the tight inflation of the country.

“The increase of rates could adversely affect housing demand because of increased EMIs and lower eligibility on home loans. This will create an impact on the ongoing growth momentum in the sector in addition to increasing input costs. However, we still believe that preference of homebuyers for owning a home will continue to boost demand.”

Niranjan Hiranandani, Vice Chairman of NAREDCO said, taming steep inflation hike is a preordained measure by RBI, given the global economic ballgame. Soaring commodity prices especially with food and energy prices, plummeting currencies, supply side shocks are the foremost reasons for rising input cost.

“It is evident that home loan interest rate hike will impair the home buying rally as pay out in terms of EMI is scheduled to rise. But according to me this crater in demand sentiment is a makeshift move, as home loans are based on floating rate for a long tenure. The EMI constraint will be eased as rates are expected to normalise once the global situation is stabilised.”

The hike in the limit of individual loans by co-operative banks by 100 per cent is a welcome initiative for home buyers who opt for home loans from co-op banks.

Atul Goel, MD of Goel Ganga Group said, the RBI’s step to increase the repo rate has been on the expected lines. To curb inflation, the regulatory bodies in India were required to control liquidity circulation in the economy. For a few months, the inflation rate has been above 6 per cent, which is beyond the RBI’s safe zone.

“If not controlled, the inflationary pressure could destabilise an otherwise bullish Indian economy. Although the recent step will increase the home loan rates, an unstable economy is not conducive to the overall health of the real estate industry. For the industry to operate optimally, it is important that the economy continues to grow in a stable, inclusive, and steady fashion.”

Suren Goyal, Partner at RPS Group said, the group welcomes the step of the apex body to increase the overall repo rates and believes it will help in clamping down inflation and smoothen economic growth.

“A rise in inflation can soften the stance on an otherwise robust real estate industry. Already raw material prices are increasing and an unbridled rate of inflation will further drive the input costs northwards, therefore resulting in cost overruns for the developer fraternity.”

Manoj Gaur, CMD of Gaurs Group and President- CREDAI NCR said it has been a fine balancing act by RBI.

“We understand that the hike in repo rate by 50 basis points will impact interest rates of consumer loans and make home loan dearer right at the time when real estate sector was coming out of the throes of pandemic and affect sales in the short term. However, by reining in inflation it will ultimately benefit the real estate sector that is bogged down by high input costs.”

Amit Modi, President of CREDAI Western UP opined that the increase in the repo rate will hamper the sentiments of the buyers, especially first time home buyers who are heavily reliant on home loans.

“It will be a barrier to the growth trajectory of the revived sales post-Covid. Millions of homebuyers will be sidelined and alienated from the property markets after the hike. It will slow down the pace of sales that has taken a rise in the recent past.”

Pradeep Aggarwal, Chairman of Signature Global (India) said the repo rate hike could be termed as a reformative move, the stated aim was clear in current macro and micro economic conditions.

“There was no other option left but to rein in inflation through monetary control measures. This might slightly influence real estate, but it will not impact consumer confidence or demand. Simultaneously, increasing the 100 per cent limit of individual loans by apex bank for co-operative banks, would surely spread a positive communication among each stakeholder.”

Sanjay Sharma, Director of SKA Group said the repo rate hike comes at the time when there was a renewed buyer interest in every segments of the real estate

“This move will definitely have an impact on buyers’ sentiments but at the same time let’s wish that the step brings the expected relief and benefits the sector that is also reeling from high input costs on account of various factors including inflation.”

Dharmesh Shah, CEO of Hero Homes said that there will also be a certain increase in home loan rates that will backtrack home buyers’ aspirations to invest in property markets and impact residential sales for a short period of time.

Prateek Mittal, Executive Director at Sushma Group said the latest move will definitely help the country as well as benefit the real estate sector that is already battling high input costs on account of various external factors and the consequent increase in fuel cost.

“Though this increase will also impact the buying power of consumers, we feel the impact will be taken in stride.”

According to Sharad Mittal, Director and CEO of Motilal Oswal Real Estate Funds: “Now with mortgage loan rates set to go up, we may notice a slight demand blip in the short term but overall outlook on the sector remains strongly bullish in the long term.”

“In an interesting move, RBI has now allowed rural co-operative banks to lend towards residential housing projects. This will help improve much-needed liquidity in the sector.”

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Eco Survey aims to fast-track India’s dream of realising Viksit Bharat goal: Industry

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7 mins ago

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January 31, 2025

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New Delhi, Jan 31: The Economic Survey 2024-25 is another step to fast-track India’s dream of realising the long-term vision for Viksit Bharat, industry leaders said on Friday.

The Survey rightly acknowledges the role of the private sector in nation-building and is forthright in its call for lowering the cost of business through deregulation and “getting out of the way of business” to accelerate growth and create jobs amid a challenging global environment, CII Director General Chandrajit Banerjee said.

The Survey displays a futuristic vision by exhorting the nation to focus on key priority areas, namely attracting foreign investment for emerging as a competitive and innovative economy, strengthening domestic supply side capability and resilience, taking a calibrated approach towards climate change and energy transition and focus on education and skilling of the youth to match global technology advancements, he said.

Moreover, it also focuses on “raising productivity of the primary sector and above all improving governance while creating trust by launching ease of doing business 2.0”, Banerjee added.

Going forward, CII shares the outlook articulated by the Survey on India’s growth prospects by projecting a GDP growth rate in the range of 6.3-6.8 per cent for 2025-26 versus 6.4 per cent in the current year on account of the fragile external milieu and current state of domestic demand.

The Survey mentions that inflation is on a credible downtrend and the current account deficit is within the comfort level, which are very positive takeaways.

According to Grant Thornton Bharat Partner and Financial Services Risk Leader Vivek Iyer, balancing regulation and innovation while keeping an eye on the financial stability risks seems to be the key message of the Economic Survey.

“We see this as an indication to move towards more principle-based regulation vis-a-vis the current approach of operational guidelines. This also means the growth of a self-regulatory organisations (SRO) ecosystem in India and we can expect more formal recognition of many SROs in the year to come,” Iyer mentioned.

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Sensex, Nifty surge as markets cheer Economic Survey ahead of Budget

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2 hours ago

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January 31, 2025

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Mumbai, Jan 31: The Indian stock market on Friday continued its rise for the fourth straight day as Finance Minister Nirmala Sitharaman presented the Economic Survey 2024-25 in Parliament ahead of the Union Budget 2025-26.

The Economic Survey pegs India’s GDP growth at 6.3-6.8 per cent for 2025-26.

The BSE Sensex touched an intra-day high of 77,549.92 before closing at 77,500.57 by gaining 740.76 points or 0.97 per cent. The NSE Nifty ended 258.90 points, or 1.11 per cent, higher at 23,508.40. The index moved between 23,530.70 and 23,277.40 during the day.

The week concludes on a mixed note — heavy selling at the start, a brief recovery, and now a wait-and-watch approach ahead of the budget, market experts said.

Only four stocks on the 30-share BSE Sensex traded lower — ITC Hotels which was down by 4.24 per cent, Bharti Airtel, ICICI Bank, and TCS.

Meanwhile, the top gainers on Sensex were Adani Ports & SEZ, Titan, Mahindra & Mahindra, IndusInd Bank and others.

On Nifty, 45 out of 50 stocks ended in the green, and the biggest gainers were Trent, BEL, Tata Consumer Products, Titan and more.

However, the top losers include Bharti Airtel, ITC Hotels, Kotak Mahindra Bank, and others.

Consumer durables was the top-performing sector rising 2.09 per cent, followed by auto, realty, oil, and FMCG indices which were up over 1 per cent each.

However, IT, Metal, and Media stocks were also trading higher and the Nifty Bank index was flat.

In the broader market, the BSE Midcap was up 1.14 per cent, while the BSE Smallcap gained 1.24 per cent.

On the NSE, 1,933 stocks advanced, while 636 stocks declined during the trading session. Additionally, 18 stocks hit their 52-week highs, while 46 stocks touched 52-week lows.

The Economic Survey 2024-25 pegs India’s GDP growth at 6.3-6.8 per cent for 2025-26.

According to the survey, the Modi 3.0 govt will continue its emphasis on micro, small, and medium enterprises (MSMEs) and good rabi crop production to accelerate growth and employment in the economy.

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Budget Session To Feature Key Economic & Policy Bills Shaping India’s Fiscal Landscape

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1 day ago

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January 30, 2025

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New Delhi: Following the presentation of the Economic Survey on January 31 and the Union Budget on February 1, the Budget Session 2025 is poised to address a range of significant legislative matters.

This year’s session will not only include the introduction and passage of key bills but also crucial financial discussions that will shape India’s fiscal landscape.

Series Of Important Bills Likely To Be Taken Up

A series of important bills are likely to be taken up during the session. These include the Banking Laws (Amendment) Bill, 2024, aimed at strengthening banking regulations and oversight, and the Railways (Amendment) Bill, 2024, which focuses on enhancing the operational efficiency of the Indian Railways.

Another notable proposal is the Disaster Management (Amendment) Bill, 2024, which seeks to improve disaster response mechanisms across the country.

Additionally, the Oilfields (Regulation and Development) Amendment Bill, 2024 will propose updates to the laws surrounding oil exploration and extraction, while the Boilers Bill, 2024 is set to introduce new safety and operational standards for boilers in industrial applications.

Among other bills likely to be introduced is the Readjustment of Representation of Scheduled Tribes in Assembly Constituencies of the State of Goa Bill, 2024, which will address the reallocation of assembly constituencies to better represent scheduled tribes in the state.

The Waqf (Amendment) Bill, 2024 and the Mussalman Waqf (Repeal) Bill, 2024 are also expected to bring reforms to the management of religious endowments.

Maritime Laws To See Several Updates

Maritime laws will see several updates, with the Bills of Lading Bill, 2024, Carriage of Goods by Sea Bill, 2024, Coastal Shipping Bill, 2024, and the Merchant Shipping Bill, 2024 all set to modernize shipping regulations.

Above all, the Finance Bill, 2025 will be central to implementing the budgetary proposals and tax reforms which will be announced by the finance minister on February 1.

Other key bills include the Protection of Interests in Aircraft Objects Bill, 2025, which will safeguard financial interests related to aviation, and the Immigration and Foreigners Bill, 2025, which will bring changes to immigration and foreigner regulations in India.

In terms of financial business, the session will see the discussion and voting on Demands for Grants for 2025-26, followed by the introduction, consideration, and passage of the related Appropriation Bill.

The Discussion and Voting on Demands for Grants for 2025-26 is an essential aspect of parliamentary procedures, allowing for the approval of government spending for the upcoming fiscal year while promoting accountability and transparency.

Demands for Grants are essentially requests made by the government to Parliament, specifying the amount of money it needs to meet its expenses for a given year.

These expenses cover a wide range of areas, such as infrastructure, healthcare, defence, education, welfare programs, and more. Each ministry or department submits its own Demands for Grants, detailing the specific amounts needed to fund its activities and programs.

Additionally, the Second and Final Batch of Supplementary Demands for Grants for 2024-25 will be reviewed, along with the introduction and passage of the relevant Appropriation Bill.

What Are 2nd & Final Batch Of Supplementary Demands For Grants For 2024-25

The Second and Final Batch of Supplementary Demands for Grants for 2024-25 refers to additional funds that the government seeks to allocate after the presentation of the annual budget for the fiscal year. These supplementary demands arise when there are changes in the government’s spending needs, which were not anticipated during the initial budget preparation.

The session will also address the Demands for Excess Grants for 2021-22, which will require discussion, voting, and the introduction of a related Appropriation Bill.

Demands for Excess Grants for 2021-22 refer to additional funds that the government seeks to appropriate for the financial year 2021-22 when the expenditure incurred by various ministries or departments exceeded the amount originally approved by Parliament in the budget for that fiscal year.

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