Impact of CRR and Repo on Real Estate Industry in 2013 and Expectations

Hopefully monetary and fiscal policies of 2013 will prove promising for both realtors as well as buyers
By: Tarun Shienh, Premia Projects, Real Estate Guru
 
Feb. 10, 2013 - PRLog -- Real Estate, whether its Commercial, Residential or Infrastructural Realty Sector, CRR and Repo Rate have a great impact on the industry. RBI in its monetary policy review during Oct 2012 kept its policy repo rate unchanged at 8 percent,  but slashed the Cash Reserve Ratio (CRR) by 25 basis points to 4.25 percent. According to RBI, inflationary pressure reflected in non-food manufactured products still remains in above comfort zone. The inflationary pressure forced RBI to keep repo rate constant at 8 percent. RBI cuts CRR i.e. the amount of deposits that banks must keep with the central bank by 25 bps to 4.25 percent. This move will inject  17500 crore into the banking system lead to the lowering of interest rates  which is suitable for small and big investors and gives a major boost to real estate sector.

It is a positive step that would boost housing demand and encourage foreign investment in the sector. This would also lead to reduction in interest rates for buyers as well as builders and developers. It is a small but necessary positive move to boost investment as well as demand in the real estate sector. These growth oriented monetary measures combined with the government's fiscal measures should augur well for the industry in 2013. RBI has shown commitment to improve liquidity in a cash-strapped economy by reducing the interest rates. There should be a revival in investment and growth, including in the real estate space.  RBI's policy is definitely a key to boosting real estate market sentiment and sending out positive signals to global investors, backed by relaxation in repo and CRR and contained inflation, institutions are expected to offer better rate of interest on loans and may also increase deployment in infrastructure and development projects.
However, RBI needs to continue to ease fund supply position, month-on-month and quarter-on-quarter for realty sector.  To revive housing industry, there is also a need to bring down the high mortgage rates to improve common man's affordability, which had been hit in past because of high inflation and rocketing interest rates. “Hopefully monetary and fiscal policies of 2013 will prove promising for both realtors as well as buyers” as said by Mr. Tarun Shienh, Managing Director (Premia Projects Ltd) and recently honored as Real Estate Guru by Property Observer, Real Estate Lifestyle Magazine.  Mr Tarun Shienh, a Real Estate Veteran and Visionary Entrepreneur who has over 17 years of diverse rich experience cross real estate and financial services industry was also showcased by Property or Paisa, Real Estate News Magazine as a Man who changed the name of commercial real estate.
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Source:Tarun Shienh, Premia Projects, Real Estate Guru
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