Real Estate sector will face challenges in short term with unchanged repo rate: Knight Frank India

With recent sales in the real estate sector remaining subdued across the country, stakeholders were hoping for a rate cut this time

Dec 02, 2014 03:12 IST India Infoline News Service

Samantak das, Knight Frank India
Not bowing down to the pressure from the Finance Minister, Dr. Raghuram Rajan, RBI Governor said that there would be no rate cuts in the central bank's bi-monthly monetary policy review. Dr. Rajan said that it would be premature to change the monetary policy at the current stage, yet hinted that if things progress as they are right now, early next year could see some rate cuts. 

Samantak Das, ?Chief Economist & Director Research, Knight Frank India said this was "expected' and that "the RBI has kept key policy rates unchanged to ensure that inflationary expectations are brought down in the country"

In his statement, he also mentioned that performance manufacturing sector was "not so inspiring" and the fall in the Last quarter's GDP growth did raise hopes for a potential rate cut.

He opined that with recent sales in the real estate sector remaining subdued across the country, stakeholders were hoping for a rate cut this time to initiate tractions in the market. However, given the current scenario of high optimism along with economic fundamentals falling in place, the RBI may look at testing the sustainability of the economic progress for one more quarter. Hence, the real estate sector will have to face the challenges in the short term but going forward we do expect the RBI to revisit its stance in the next review.

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