Realty News Roundup: SBI Cuts Lending Rates After RBI Move; Noida Authority To Get New CEO

Realty News Roundup is PropGuide's selection of top stories from the real estate sector.

Top News

State lender State Bank of India (SBI) has become the first bank in the country to have lowered interest rates, after the Reserve Bank of India's rapo rate cut announcement on September 29. SBI has reduced interest rate by 40 basis points to 9.3 per cent. Reports suggest that SBI's decision will put pressure on other home loan providers to follow suit. Welcoming Reserve Bank of India's (RBI's) rate cut, real estate developers across the country requested banks to ensure the benefit are passed on to home buyers. Meanwhile, RBI Governor Raghuram Rajan batted for price cut in the real estate sector. "Rate cut alone will not clear backlog in real estate. Both (price cut & rate reduction) will have to operate," he said.

The RBI has released detailed guidelines on lowering minimum risk weight on home loans from the current 50 per cent. Industry experts believe that RBI's proposal will help sales revival in the sector. Reports also suggest that it will boost the growth and return on equity for housing finance companies.

Off the front page

While Greater Noida Industrial Development Authority's (GNIDA) Rama Raman has relinquished his position as the chief executive office, he will continue his position as the authority's chairman. Deepak Agarwal, additional CEO of the authority, will be taking charge as the acting CEO. Meanwhile, the Noida Authority Board has proposed to revise its building by-laws.

Godrej Properties has sold 4,35,000 sq ft of saleable area at its commercial project, Godrej BKC in Mumbai's Bandra-Kurla Complex. According to reports, this is India's biggest end-user commercial real estate transaction. Read more.

Opinion

In an editorial on the RBI repo cut, The Financial Express says that now it depends not just on how much the banks pass on, but also on how the economic growth situation pans out. "It is over to the banks and the government now—the former for transmission and the latter for easing the obvious constraints to doing business," the editorial states. Read here.

Author Vivek Kaul says the RBI move to cut the repo rate will not revive real estate sector, but lowering home prices will. "Real estate developers have priced themselves out of the market. The sooner they come around to this reality, the better it will be for all of us," he says. Read here.