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Below  is view on RBI Monetary Policy by Sharad Mittal, Motilal Oswal Real Estate

Decadal low mortgage rates coupled with other govt driven incentives and increased value of homeownership during the pandemic provided much needed stability and momentum to the real estate sector. The robust uptake in the demand has continued despite recent inflationary pressures on commodity prices and adverse supply chain constraints.

RBI in its last two MPC meetings has hiked interest rates in order to keep the rising inflation under check. Now with mortgage loan rates set to go up, we may notice a slight demand blip in the short term but overall outlook on the sector remains strongly bullish in the long term.

In an interesting move, RBI has now allowed rural co-operative banks to lend towards residential housing projects. This will help improve much-needed liquidity in the sector.

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