The Indian Union government’s recently announced stimulus package, coupled with the Reserve Bank of India’s (RBI) move allowing banks to provide special treatment to the real estate sector are likely to change the fortunes of Indian real estate sector, which has been struggling to survive for the past six months.
Monday’s interest rate cut on housing loans up to Rs 20 lakh could further improve the sentiment, industry officials said.
"It’s a good beginning. At last, government has recognised housing as a priority sector. They have also realised that the construction and housing sectors are the largest employment generators in the country. A lot more needs to be done. But, whatever measures have been announced now, is a great relief to the industry," Niranjan Hiranandani, chairman, Hiranandani Developers said.
Priority sector status to low-value loans, restructuring of loans taken for commercial property and a reduction in the excise duty on inputs like steel and cement are expected to reduce the cost burden on developers significantly.