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Housing demand will take time to pick up in spite of Repo Rate cut by RBI

Q: Watchful customers are waiting for price corrections to happen in sluggish market after the Repo Rate cut.

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Replies (3)
1
Currently, demand in the real estate sector has remained flat for long time. While it is expected to improve, with interest rates on housing loans declining and property prices softening. Few developers too believe that demand is expected to bring around from the 4th qtr of this financial year.
Rajesh


2
Yes, but at the same time developers will have to think that demand is not expected to pick up immediately as customers remain alert and are mostly in a wait-and-watch mood. Buyers are expecting some more correction in prices.
Dharmesh Shukla


Apart from that there is a repo rates cut by RBI around 125 basis points since January,2015. In September, the Reserve Bank Of India cut its policy interest rate by 50 basis points to a 4-1/2 yrs. low to 6.75% surprised the people. Inflation is also running at a record low which could help pick up an economy that has been slowing down.
Abhijit Thanki,  Mumbai
5th October 2015


RBI Governor, Raghuram Ranjan while announcing the 4th bimonthly monetary policy told that the Banks have lowered their base rate only by 25-30 basis points in spite of the much easy liquidity conditions, which is a fraction of the 75 basis points of the policy rate reduction during January-June, even after a passage of 8 months since the 1st rate cut by the RBI.
Dharmesh Shukla,  Bangalore
5th October 2015


Right Dharmesh......we really appreciate the step taken by the RBI Governor. Many banks such as The Punjab National Bank, Bank of Baroda, Bank of India, Uco Bank, IDBI Bank, Oriental Bank of Commerce, Axis Bank and Yes Bank have announced a cut in their base rate while many state-run banks and private sector lenders have cut their base rates on 30.09.2015.
5th October 2015


3
The RBI might have cut the repo rate and banks have partly passed it to customers, but developers feel it would take a couple of more quarters for demand to bring around in the realty sector. They feels that the festive season will see a marginal improvement in demand, which is expected to pick up only from January-March next year as customers remain alert.
Keshavrao Jedhe


Hi Heshav.......
But still there are few positive signs in the realty sector, which could run demand. Not only interest rates on housing loans have declined, but also property prices have ease up. It is good time to buy property as there are lot's of freebies being offered by developers.
Rubiya,  
5th October 2015


4

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