New Delhi: Realtors' bodies CREDAI and NAREDCO on Tuesday said the Reserve Bank of India should take measures to ensure that banks pass on the benefits of previous policy rate cuts to customers as this would revive housing demand.
The RBI on Tuesday left borrowing costs unchanged but signalled a prospect of interest rate reduction later this year if strong monsoon rains dampen inflation.
"We expected a 25 bps rate cut in the monetary policy review as that would have given further momentum to economic growth, which is beginning to pick up pace and becoming broad based," NAREDCO chairman Rajeev Talwar said in a statement.
Till the next monetary policy in August, he expected the "central bank to take measures and further improve the monetary transmission so that past policy rate cuts are passed on by banks to their customers and loans can become cheaper".
The RBI has reduced the short term lending rates by 150 basis points since January last year.
Mr Talwar, who is also CEO of realty major DLF, said that any cut in lending rates on the back of better monetary transmission would boost housing demand.
Commenting on the RBI policy review, CREDAI president Getamber Anand said, "It was on expected lines. Now, banks should be advised to reduce interest on home loans by another 50 basis points".
CBRE South Asia CMD Anshuman Magazine said the RBI's status quo stance in its latest credit policy review was expected by the industry.
"What is awaited, however, is for the benefits of the central bank's earlier monetary easing initiatives to be passed on to consumers in their entirety," he added.
Knight Frank India CMD Shishir Baijal expressed disappointment with no change in policy rates and said that it would take the real estate sector much longer time to come back on the track.
"The residential property market has not been doing well and there was expectation that RBI would reduce the policy rates that would have given a boost to the residential property market," Mr Baijal said.
SARE Homes MD Vineet Relia said the RBI's decision to keep the repo rate unchanged is disappointing, though not unexpected.
"...since demand in real estate and allied industries remains sluggish, a rate cut could have improved liquidity and created renewed interest in property purchase," he added.