No relief for construction sector [July 31 2012]

“As expected the RBI maintained its Credit Reserve Ratio (CRR) from the previous announcements at 8 per cent, thus interest rates on residential property loans from banks will also continue to remain at the current level. For the housing sector, this may not be a very positive news as end-users who have been postponing their purchase decision on account of still high inflation and high interest rates cannot expect any relief in the near future. The outlook for the sector remains cautious as persistent high inflation rates are keeping construction costs up, which are not expected to come down in the near future. An additional cause of concern for the economy is slowdown in industrial growth in the last few months, which is expected to persist as debt would remain expensive whilst exchange rate for dollar is expected to remain high. ”- Sanjay Dutt, Executive Managing Director, South Asia, Cushman & Wakefield

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