Repo rate would provide a much needed stimulus

Sanjay Dutt

“The RBI’s decision to cut Repo rate for the third time this year to 7.25% would provide a much-needed stimulus to the economy. Given the tepid demand conditions in the real estate sector, a cut in repo rate bodes well to improve sentiments of home buyers and spur home-buying decisions. However, the actual impact can be seen only when commercial banks lower their lending rates. Although demand from end-users may take a bit longer to actually transform to active buying, home buyers’ interest may be rekindled and inquiries may increase in the short-term as buyers may begin anticipating lower interest rates. The cost of borrowing could also decrease marginally for developers, who have been reeling under high funding cost and increasing cost of construction. We hope that the RBI and the government together would take further measures to boost economic growth that would instil renewed confidence in the real estate sector.”