Realty sector welcomes RBI pause; sees stable rates boosting housing demand

The real estate sector has welcomed the Reserve Bank of India’s decision to hold the repo rate steady at 5.25%, calling it as a calibrated move that balances growth and inflation risks while preserving demand momentum.

According to industry experts, the RBI’s decision to keep rates unchanged and maintain a neutral stance will support the real estate sector by ensuring stability in borrowing costs. This is expected to boost homebuyer confidence, sustain demand across segments, particularly mid-income and premium housing, and provide developers with better visibility for project planning and execution.

While concerns remain around rising input costs due to global supply disruptions, the stable rate environment and strong end-user demand are seen as key factors that will help the sector maintain steady growth in the near term, they said.

Stable interest rate to provide visibility

The Confederation of Real Estate Developers' Associations of India (CREDAI), the apex body of private real estate developers in India, termed the policy stance as balanced and prudent. Shekhar G Patel, President CREDAI, said the RBI’s decision reflects a calibrated approach amid global geopolitical tensions impacting inflation, supply chains, and capital flows.

“While the domestic economy continues to demonstrate resilience, these external uncertainties necessitate a calibrated policy stance. A stable interest rate environment provides much-needed visibility to both developers and homebuyers, helping sustain demand momentum across housing segments,” he said.

He further said that there may be some near-term pressure on raw material prices due to supply chain disruptions, the policy stability, coupled with strong end-user demand, will enable the real estate sector to maintain steady growth.

Echoing this sentiment, Piyush Bothra of Square Yards said stable borrowing costs will support demand, particularly in mid-income and premium housing. However, he noted that the central bank’s cautious stance suggests stakeholders should remain prepared for potential shifts as global uncertainties evolve.

“Any movement in rates going forward will be closely linked to external factors, and both homebuyers and industry players should stay mindful of changing macroeconomic conditions while making long-term decisions,” he added.

Decision to boost liquidity conditions

Sudeep Bhatt of Whiteland Corporation said the decision strengthens liquidity conditions and investment appetite, reinforcing a growth-oriented environment for the sector.

From a developer’s standpoint, Rishabh Periwal of Pioneer Urban Land & Infrastructure said the unchanged repo rate provides stability in home loan costs, boosting buyer confidence while enabling better planning of project launches and execution timelines.

Manoj Gaur of Gaurs Group added that the RBI’s neutral stance ensures flexibility while supporting growth momentum, with stable EMIs and liquidity management expected to sustain real estate activity.

Similarly, Yashank Wason of Royal Green Realty noted that stable EMIs improve affordability and could accelerate buyer conversions, while also aiding developers in speeding up project pipelines.

Highlighting the broader macro backdrop, Aman Sarin of Anant Raj said that in the face of West Asia-driven cost pressures, a steady rate regime is crucial for maintaining confidence. Stable borrowing costs, he noted, help both businesses and homebuyers plan better, with certainty in EMIs playing a key role in converting intent into actual purchases.

However, a section of the industry expressed mild disappointment. Mayank Jain of KREEVA described the move as a “pause rather than progress,” noting that a rate cut would have further improved affordability, particularly for mid-income buyers.

“Even a small reduction in the repo rate would have eased EMIs and improved eligibility, particularly in the mid-income housing segment, where every basis point matters. That said, the RBI’s neutral stance brings predictability, which buyers appreciate in volatile times," he said.

However, with Middle East tensions influencing oil prices and broader inflation sentiment, borrowing costs are unlikely to soften immediately, he added.