Sustained economic recovery takes precedence as

 Dr. Samantak Das, Chief Economist and Head Research & REIS, JLL

Sustained economic recovery takes precedence, as RBI maintains the status quo; Competitive mortgage rates and economic recovery are key for continued residential real estate growth

Reviving and sustaining growth has been the guiding philosophy of the monetary policy through the pandemic. RBI has reinforced it by keeping the policy rates unchanged. The policy stance is a logical step to support the actual GDP growth of 1.6% that was reflected in Q4 FY 2020-21. The forecast of normal monsoons is expected to result in agricultural sector growth and drive the rural demand. The incipient recovery in the global economy has also increased exports, which is expected to provide a fillip to the economy. However, the growth is likely to be impacted by the downside risks due to the after-effects of the second wave of the pandemic.

Recovery in residential real estate that was witnessed during January-March 2021 quarter was impacted by the lockdowns introduced to control the pandemic resurgence. Though the competitive mortgage rates are expected to provide long term support for sustained growth of real estate, overall economic recovery leading to job, and income growth will be contributing factors for housing demand. We believe that low home loan interest rates, realistic property pricing, the focus of developers on project completion and economic recovery will take the residential sales in all likelihood to better levels than 2020.