Rate cut to lower loan cost, boost home sales

REAL estate developers and experts believe that the Reserve Bank of India's decision to reduce the repo rate after five long years will boost sentiment and support housing demand. Reduced rates will also lower borrowing costs for both homebuyers as well as developers, further encouraging investment in the realty market.

- ARSHAD KHAN

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) on Friday cut the repo rate by 25 basis points to 6.25%. This decision comes a week after the Union Budget wherein the government decided to cut personal income tax to boost consumption.

"The cut in rates will not only provide a boost in housing sales by offering lower interest rates on new home loans and existing floating-rate home loans but is anticipated to enhance liquidity in the market, enabling developers to expedite the completion of ongoing projects and launch new projects," said Reeza Sebastian Karimpanal, executive President - residential business at Embassy Group.