RBI POLICY 6th FEB 2020 & REAL ESTATE
In my macro analysis of Budget 2020 I mentioned that this budget is a long-term vision of the Govt to improve quality of life and ease of doing business. There are various measures to improve growth and job opportunities.
Govt has made special announcements for Real Estate Sector in the budget 2020-21 and also did lots of announcements to bring back life in Real Estate Sector during last 12 months.
My analysis is further endorsed if you see the RBI policy announced on 6th Feb 2020 – RBI is in absolute sink with the thought process of the Govt in helping the Real Estate:
• Easing on the liquidity by limiting the CRR of banks which ultimately result in cheaper home loan rates and boost demand in the sector.
• Making loans cheaper not by virtue of reducing Repo Rate but by other adjustments in RBI lending norms, again to bring liquidity into operation.
• RBI is ready in fulfilling the long-term demand of the developers for one-time loan restructuring, that will turn 1-year protection from asset downgrade (Incentive to distressed builders, comfort for lenders) Lenders told to postpone downgrade of builder loans by 1 year for projects facing genuine delays.
My Submission ahead: –
Govt has really gone a step ahead in helping the Real Estate Industry the second largest employment generator, starting from rationalization of GST, SOPS for affordable housing to creating an AIF of Rs 25,000 crores for easing liquidity in the system to easing policy measure for NBFCs in the current budget, followed by recent announced RBI policies.
As an industry person I can say that the Govt has addressed both Supply & Demand side in best possible ways.
It is now for the Real Estate Developers to make the best use of the above ecosystem in driving business.
My understanding is that the developers must take all possible measures to drive more SALES in virtue of generating demand from end-users’ side.The real problem of the industry is SALES & ONLY SALES
(Here is my video on this https://www.youtube.com/watch?v=o46e3Krd6BU&t=4s)
PROBLEM SALES – SOLUTION SALES
Time to action
Writer- Sanjeev Kathuria Real Estate industry Expert and COO CRC Group