"Land and input costs for developers are going higher day by day. Also, implementation of GST will increase the cost further," said Getamber Anand, national president of CREDAI.
GST is expected to be implemented by April 2016.
However, it expects housing sales across the country to see a remarkable recovery by financial year 2016-17 on reducing home loan rates, with the real traction in demand starting this festive season.
"If the data of housing shortage is to be believed, this slowdown will not last long," Anand said. "The recovery has already started, and this Diwali season is expected to be very good as banks will pass on the RBI rate cut benefits to home buyers."
The Reserve Bank of India (RBI) has made three rate cuts of 25 basis points each since January 2015, the latest being yesterday, which takes the cumulative cut to 75 basis points this year.
Several banks including the State Bank of India (SBI) on Tuesday slashed lending rates by up to 0.3%. While SBI reduced its base rate or minimum lending rate to 9.70 per cent from 9.85 per cent effective June 8, making it the second rate cut by SBI in about two months, another state-owned lender Allahabad Bank cut base rate 0.30 per cent. Dena Bank and Punjab & Sind Bank also reduced their base rate by and 0.25 per cent each.
"We expect another 25 bps rate cut in another 2 months," Anand said.
SOURCE: ETRealty.com
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