The US Federal Reserve's 50 basis points rate cut on September 19, 2024, could impact Indian real estate in several ways:
1. Cheaper Capital: Global investors may shift to higher-yield markets like India, boosting foreign investments in commercial real estate.
2. Stronger Rupee: A weaker US dollar may strengthen the rupee, lowering debt servicing costs for developers with foreign loans but potentially reducing NRI demand due to less favorable exchange rates.
3. Lower Borrowing Costs: If the RBI follows suit, home loan rates could drop, making housing more affordable, particularly in mid-range and affordable segments.
4. Rising Inflation: Increased liquidity might lead to inflation, driving up construction costs and potentially impacting property prices and affordability.
While the rate cut offers growth opportunities, challenges such as inflation and reduced NRI demand may arise.