RBI keeps growth a priority by keeping policy rates unchanged, sustained benefit for real estate: JLL India

10 Feb 2022 , 05:01 PM

The policy of continuous support for sustained and durable growth is driving to maintain the status quo in repo rate at 4% as well as the reverse repo rate at 3.35%. Though the current inflation levels are elevated, it is expected to moderate over the next few quarters. The Monetary Policy Committee (MPC) has unanimously maintained the ‘accommodative’ stance to give priority to GDP growth. This decision of MPC is extremely welcome for the Indian real estate sector.

Indian residential market staged a smart recovery in 2021 as sales grew by 72% year-on-year and reached close to 90% of the pre-Covid 2019 sales levels. One of the important factors driving home buying is record-low mortgage rates. With this unchanged policy rate, the lending agencies will continue to maintain the prevailing low home loan interest rate.

Our expectation is that during the current calendar year, the residential sector will surpass the pre-pandemic level of sales backed by ‘affordability synergy’. However, we have to keep a close watch on the global policy changes and headwinds, particularly the movement of the US fed rate.

The author of this article is Dr. Samantak Das, Chief Economist, and Head, Research and REIS, India, JLL

The views and opinions expressed are not of IIFL Capital Services, indiainfoline.com