News & Views on Indian Real Estate

Thursday, July 31, 2008

RBI move adds to real estate sector's woes

With RBI announcing the hike in repo rate by 0.50 per cent and the CRR by 0.25 per cent, the real estate sector is likely to receive increased burden in terms of losses and will further result in a slowdown for the sector.Commenting on the same Mr Sunil Malhotra, Vice President-Finance, Omaxe Ltd mentioned, The hike in repo and CRR rate will impact negatively on real estate sector. Though we understand the current crisis and RBI's burden, but this hike will further dampen the spirit of the sector.
He further added, the real estate sector across the board is witnessing a slowdown because of paucity of funds among investors. The hike would mean flow of money to the sector would be tighter than before. The developers will now have to look towards other sources of funds which could be on higher rates thus impacting the cost benefit ratio of each company.However at Omaxe we may not feel slowdown in the company's investment plans and they stay as announced earlier.

Mamta Sinha said...

This act of RBI would no doubt lead to a fall in realty sector.

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