MCHI bats for home-buyers as RBI jacks up repo rate

MUMBAI, July 26, 2011: Raising its concern for home buyers, Maharashtra Chamber of Housing Industry (MCHI), the voice of the real estate industry, has expressed the fear that the RBI move to increase the repo rate by a huge 50 bps will adversely impact the industry.
While appreciating RBI for its steps to curb inflation, MCHI appealed to the various home loan institutions and banks to absorb the impact and not to pass it on to the end customers.
“Bankers have systematically raised home loan interest rates as and when RBI hiked the repo rate, and we strongly fee that they should consider the home buyers’ interest,” said Mr Paras Gundecha, President of MCHI.
“I am sure bankers would heed to our request on behalf of the new home buyers who are hard pressed due to the ever rising prices of essential commodities and the impact of fuel price hike,” Mr Gundecha said.
This is the second rise in repo rate by RBI in a month and a half and this will have a major negative impact on the real estate industry which is already reeling under the impact of increasing cost of inputs and fall in demand due to increasing prices, he said.
MCHI appealed to the government at the centre and the States to immediately open a dialogue with the industry on steps to ensure that the real estate industry regains its health and contributes to the growth of the country’s economy.
Over 200 industries depend on real estate industry which is also labour-intensive, hence it is the paramount duty of the government to help it grow instead of taking steps to further cripple it, Mr. Gudecha said.
The recent developments like plans to increase premium on FSI, coupled with the rising costs of borrowing have caused a sense of fear and uncertainty among home-seekers, he said and suggested that all concerned, including the government, the industry and the RBI, must chalk out a plan to rejuvenate the development process.