Real Estate- A Real Asset

To give fillip to the real estate sector HDFC reduced its Retail Prime Lending Rate (RPLR) on housing loans, on which its Adjustable Rate Home Loans (ARHL) are benchmarked, by 15 basis points, with effect from April 22, 2020. Also, hours after, Reserve Bank of India announced 75 basis points cut in repo rates, India’s largest lender State Bank of India following a 75 basis points reduction in interest rate, SBI’s external benchmark linked lending rate (EBR) will come down to 7.05 per cent per annum from 7.80 per cent earlier. These all will certainly boost the housing sector.

Real estate is an immensely important asset class, with market and stock value’s uncertainty; it has become all the more valuable. The momentum of affordable housing will pick up pace after RBI’s announcement, as it will infuse liquidity in the market. People with salaried incomes are facing difficulties in paying rents in these times, the affordable housing demand will get push because of this factor. As more and more people post lockdown with regular income jobs will think about purchasing their own homes. The recent announcement of banks switching to reduced home loan rate will also give a boost to the affordable housing sector.

Affordable housing sector will get the required push if immediate fund releases as per the budget allocation are introduced by the government. The sector enjoys the status of infrastructure; along with that single window clearance system that would be helpful in maintaining the momentum.

Mr. Pradeep Aggarwal,Founder and Chairman – Signature Global India Pvt. Ltd., Chairman – ASSOCHAM National Council on Real Estate, Housing and Urban Development, said, “Builders have taken this time to learn new business strategies and adopt to technology based innovations. The transition to virtual tours and project launches is inevitable. It will definitely help them in coping with minimal or no sales happening for this lockdown period. Nobody can be fully prepared with what is going to shape the economy in the coming quarters, least we can do is follow government guidelines and take care of our labourers in the best way possible.

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