There are other positive signs too. Outsourcing companies have seen a healthy growth in the business with the devaluation of the rupee. That can be seen in the large amounts of office space that was leased in 2014.
If business development lead to IT companies hiring more talent and giving higher increment to keep talent, it will surely begin home sales.
For potential buyers, cheaper home loans could be the trigger they are looking for. It is a step in the right direction as property fence sitters will now take the dive, which in turn will lead to increased home sales.
This move will really comfort the load on the buyers and developers. They will be hopeful now that with this interim announcement of rate cut the banks will take the reminder and pass on the benefits to the end user which will give rise to the demand and pull of housing ahead of the festive season.
This move will not only help developers start more projects at favorable capital but also create vast offerings benefiting home buyers.
Both these rates have not come down in addition with the reduction in repo rates and there is still a large gap between the same. The large gap should not be used by banks to manage their NPAs, defaulting promoters should be brought to book and instead the reduction should be passed on to where is it actually intended and required.
Right Ketal,
And RBI's move comes at a time when things have begun to look up for the real estate sector as the economy has been performing better, salary increments are expected to be healthier and if the amount of office space that was leased in 2014 is any indicator, job growth is not far away either.
Yes, the repo rate cut by the central bank could signal the beginning of the change for real estate industry that has been hit by slowing sales and a huge liquidity crisis over the past 2 yrs.
Developers were in doubt that home sales will get a big push before the festive season later in the year but now they are very much confident after the Reserve Bank of India's repo rate cut. This move could lift the sentiment.
If this maintains, then home loan rates, bank lending rates as well as cap rates for REITs will come down. Home sales have been on the downtrend for the past 2 yrs. The quarter to September 2014 saw a drop of 25% in home sales in India's top 6 cities, compared to the previous 3 months period, to jump to the lowest level ever since 2009 while unsold inventory rose to a high of 815000 apartments.