Views on Monetary Policy | Colliers| India Sotheby’s International Realty | Vestian.

Bangalore, 8th of August, 2024 :

1. Mr Saket Dalmia, President of India Sotheby’s International Realty

The RBI’s decision to maintain the policy rate aligns with expectations, given the current inflation and global economic scenario. While the near-term outlook for global growth appears positive, the medium-term outlook faces challenges due to demographic shifts, climate change, geopolitical tensions, and fragmentations. Despite this, domestic economic activity remains resilient.

The MPC emphasized the need to maintain a disinflationary stance to ensure inflation aligns with targets while supporting growth, thus keeping the policy rates unchanged.

Stable interest rates are beneficial for various industries, especially real estate.

We support the RBI’s current stance and anticipate future rate cuts, which would positively impact the real estate sector and contribute to overall economic stability and growth.

2. Mr Vimal Nadar, Senior Director & Head, Research at Colliers India

Amidst swift changes in global economic undercurrents with a moderate view on global economic outlook, RBI has remained cautious and maintained benchmark lending rates at 6.5% for the ninth consecutive time. Inflation, despite being within 6% levels, remains above the benchmark of 4% and thus, continuation of withdrawal of accommodation. In the first MPC meet after the Budget, the RBI has projected a GDP growth rate of 7.2% for FY 2025 led by robust high frequency economic indicators across key sectors. Interestingly, stability in interest rates coupled with the recent announcement to rationalize stamp duty charges along with concessions for women homebuyers bodes well for real estate sector especially residential segment. Strong visibility in financing charges should help homebuyers and developers alike in the upcoming festive season. 

Moreover, partial withdrawal of the applicability of the revised LTCG tax arising out of sale of land & buildings retrospectively provides elbowroom to effect housing sales with minimal tax outgo. This is likely to buoy investors’ & homeowners’ sentiment and thus the real estate sector at large throughout 2024.  
3. Shrinivas Rao, FRICS, CEO, Vestian said, “RBI maintained status quo for the ninth consecutive time and kept the repo rate at 6.5%. Sticky inflation, elevated food prices, and global macroeconomic uncertainty likely influenced this decision. A steady monetary policy for the past one and half years has ensured stability in the real estate sector, boosting demand for all asset classes. This upward momentum is expected to continue as the repo rate is anticipated to remain stable for a couple of more months due to rising inflation amid increasing geopolitical frictions in the Middle East.” 

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