The real estate sector has welcomed the Reserve Bank of India’s decision to maintain status quo in its last policy announcement for the current fiscal, saying the decision provides much-needed policy stability at a time of global currency volatility and bond yield pressures.

In line with Street expectations, the RBI’s Monetary Policy Committee (MPC), under Governor Sanjay Malhotra, unanimously retained a neutral policy stance and left all key interest rates unchanged, with the benchmark repo rate held at 5.25%. The central bank raised its FY26 GDP growth forecast to 7.4%, while the CPI inflation projection was kept at around 2.1%.

Stable rates support demand, improve buyer confidence

Shekhar G Patel, President of CREDAI, said the continuity in rates is constructive for the sector, where predictability in financing costs plays a critical role in sustaining demand and investment sentiment.

“As liquidity conditions normalise, a stable rate regime supports measured growth across segments. Calibrated monetary easing over time, aligned with evolving macroeconomic conditions, can further improve housing affordability, expand access to home ownership, and support a more inclusive growth path for the sector,” he said.

Echoing similar views, Anuj Puri, Chairman of the ANAROCK Group, noted that the unchanged repo rate means home loan EMIs will remain steady, helping buyers plan purchases with greater certainty. “This will keep buyers engaged but does little to lift demand further or materially improve affordability. The upside is that current borrowers will not face EMI shocks, and new buyers benefit from predictability,” he said.

Puri pointed out that while demand for affordable and mid-segment homes remains resilient, affordability continues to be strained due to elevated prices. He added that a rate cut could have encouraged fence-sitters to return to the market.

According to ANAROCK Research, affordable housing remained subdued in 2025, with its share at around 18% of total housing sales across cities, down from 20% in 2024 and sharply lower than 38% in 2019.

He also highlighted that the Union Budget 2026-27 failed to offer meaningful relief to affordable housing buyers, stressing the need for interest stimulants and targeted tax breaks for both developers and buyers to revive the segment.

REIT financing relief, infra push seen aiding sector growth

On the positive side, Puri said the RBI’s move to allow banks to lend directly to REITs would ease capital raising, lower costs and support asset expansion in office and retail segments, provided strong regulatory safeguards are maintained.

Shishir Baijal, International Partner, Chairman and Managing Director of Knight Frank India, described the RBI’s decision as a cautious, stability-focused move in a volatile global environment.

He said the pause reflects the central bank’s priority on managing currency pressures and external risks, even as the growth outlook remains stable. “The repo rate continues to remain at its lowest level in the post-pandemic period. While further cuts would have boosted homebuyer sentiment, especially in affordable housing, a stable interest rate environment offers predictability for both homebuyers and developers,” Baijal said.

Baijal added that banks are expected to pass on a greater share of existing rate benefits to consumers in the coming months and that the easing of rules for bank lending to REITs would improve access to lower-cost funds.

The realty industry backed the RBI’s policy continuity amid expectations of stronger growth following the Union Budget’s push for higher government spending and improving external trade prospects. Industry players believe stable borrowing costs, coupled with infrastructure-led development, will help sustain housing demand and investment sentiment, even as inflation remains on the central bank’s watchlist.

Parvinder Singh, CEO, Trident Realty, said monetary policy continuity is likely to sustain confidence among both long-term investors and homebuyers. “Monetary stability, coupled with the government’s continued focus on capital expenditure, is creating a strong foundation for asset creation and wealth preservation.”

Prashant Sharma, President, NAREDCO Maharashtra, said the RBI’s decision provides much-needed stability to the real estate sector at a time when growth expectations have strengthened following the Union Budget’s push for higher government spending and improving external trade prospects after recent trade agreements. He noted that rising fiscal support and infrastructure-led development gaining momentum will help sustain housing demand and enable developers to plan investments with greater confidence.

Yateesh Wahaal, Director Finance, M3M India, said the monetary continuity complements the Union Budget 2026’s strong push for infrastructure-led growth, which is critical for strengthening urban ecosystems and improving liveability across both emerging and established markets. Stable rates, combined with sustained public capital expenditure, are expected to support long-term housing demand, accelerate project execution, and strengthen overall sector fundamentals.

Wahaal said the policy environment is likely to create favourable conditions for delivering high-quality, future-ready developments aligned with evolving consumer aspirations.