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Builders unhappy with RBI policy; seek interest rate cut

NEW DELHI: Realty firms and property consultants today expressed disappointment over RBI's decision to keep key policy rate unchanged and said it was the right time to bring down the borrowing cost for home buyers as well as developers.

"CREDAI has expressed strong disappointment at the RBI's latest credit policy. The Central Bank should shed its negative approach towards the real estate industry," the apex realtors' body said in a statement.

Stating that the cost of funding for real estate is very high, CREDAI President Lalit Kumar Jain said the RBI should come out with a positive policy and facilitate reduction in interest rate.

"We have been pointing out that the real estate industry is not only the 2nd largest employer in the country but also contributes handsomely to the GDP and growth of 400 other industries," he added.

After the recent meetings with Finance Ministry officials, CREDAI had been hopeful that the government and the RBI would come out with "pragmatic policy", Jain said.

Echoing similar views, CBRE South Asia Chairman and Managing Director Anshuman Magazine said: "The RBI's decision to keep the key policy rates unchanged once again is a disappointment for the real estate sector".

"While a cut of 25 base points in the CRR rate does infuse some liquidity, a reduction in the repo rate would have helped boost investor sentiment. The festive season coupled with an expected change in policy rates would have been the ideal time for improving consumer confidence," Magazine said.
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