RBI MPC: Real estate sector expects status quo on repo rate, says stability key for housing growth

The real estate industry expects the Reserve Bank of India's (RBI) monetary policy committee (MPC) to keep the benchmark repo rate unchanged at 5.25% when it announces its policy decision on August 5. According to developers, policy stability will help sustain housing demand, improve homebuyer confidence, and support long-term investment amid persistent global uncertainties.

The six-member MPC, chaired by RBI Governor Sanjay Malhotra, is holding its three-day policy meeting from August 3 to August 5. The central bank is widely expected to keep both the repo rate and its neutral policy stance unchanged, adopting a data-driven, wait-and-watch approach as it balances resilient domestic growth against geopolitical risks, volatile crude oil prices, tighter global financial conditions, and weather-related inflation concerns.

The RBI kept the repo rate unchanged at 5.25% in its June policy review. While retail inflation has remained largely under control, policymakers are expected to remain cautious amid uncertainty stemming from the Middle East conflict, global commodity price volatility and the potential impact of El Niño on food prices.

Developers seek policy stability

Industry leaders believe policy stability, rather than another rate cut, is the need of the hour.

Pradeep Aggarwal, founder & chairman, Signature Global (India) Ltd., said the global economy continues to face uncertainty due to geopolitical tensions, trade disruptions and volatile commodity prices, making a cautious monetary policy approach appropriate.

"Domestic inflation remains within the RBI's manageable range, providing adequate room to maintain policy stability. The housing sector has been witnessing healthy demand, supported by lower home loan rates, improving affordability and strong consumer confidence. Maintaining this supportive policy stance will help sustain housing demand, strengthen allied industries and continue contributing meaningfully to India's economic growth," he said.

Yateesh Wahaal, Director, M3M, expects the central bank to maintain policy stability, saying a stable interest rate environment would further improve affordability and encourage homebuying, particularly in the mid-income and premium housing segments.

"A stable interest rate environment also provides greater certainty for developers and investors. Backed by robust infrastructure development and rapid urbanisation, India's residential real estate sector remains well-positioned for sustained growth," he said.

Manoj Gaur, CMD, Gaurs Group, said inflation has remained broadly under control while the economy continues to demonstrate resilience despite global uncertainties.

"Given the growth-friendly stance adopted by the RBI, we expect the MPC to keep the repo rate unchanged. Stability in interest rates gives homebuyers the confidence to plan one of the most important financial decisions of their lives. With the housing market exhibiting high end-user participation, maintaining the status quo would help sustain the positive momentum," he said.

Sahil Agarwal, CEO, Nimbus Group, echoed similar views, saying a stable interest rate environment has supported the residential market's steady growth over the past few years.

"As the economy continues to remain resilient despite global headwinds, we expect the RBI to maintain the current repo rate. A stable policy environment reinforces homebuyer confidence and encourages long-term financial commitment, which is particularly important for housing," he said.

Rishabh Periwal, Senior Vice President at Pioneer Urban Land and Infrastructure Ltd., believes an unchanged repo rate would provide borrowers greater certainty over EMIs, an important factor influencing home purchase decisions.

"With the festive season approaching, a stable interest rate environment is likely to sustain positive buyer sentiment and support residential demand across key markets," he said.

Ashish Agarwal, Director, AU Real Estate, said stability in the interest rate cycle is an important enabler for developers as it supports buyer confidence and long-term business planning.

"Homebuyers today are driven by product quality, location, lifestyle offerings and trust in the developer, with financing being one of several considerations. A stable policy environment will help sustain demand, encourage new project launches and strengthen the overall market," he said.

Stable rates seen boosting investor confidence

Umesh Gowda H.A., Chairman and Founder of Sanjeevini Group, said the RBI is expected to prioritise macroeconomic stability over monetary easing in view of geopolitical tensions, supply chain disruptions and renewed inflationary pressures.

"A status quo on the repo rate appears to be the most prudent approach. For the real estate sector, stable interest rates provide certainty to both developers and homebuyers, allowing investment and purchase decisions to continue without disruption," he said.

Mukesh Choudhary, Managing Director, Accuspace, said policy consistency is particularly important during periods of global volatility.

"The RBI faces the delicate task of balancing economic growth with inflation management. A wait-and-watch approach would reassure both domestic and foreign investors. For commercial real estate and institutional investments, predictable interest rates are often more valuable than abrupt policy shifts," he said.

Alternative investment funds (AIFs) focused on real estate also favour policy continuity. Ankur Jalan, CEO of Golden Growth Fund, said macroeconomic stability and predictable policy are more critical than short-term rate movements.

"A stable interest rate environment supports disciplined capital allocation, sustains investor confidence and enables developers to execute projects without facing abrupt increases in financing costs. India's real estate sector continues to benefit from strong structural demand, rapid urbanisation and increasing institutional participation," he said.

Lalit Parihar, Managing Director of Aaiji Group, said the RBI is likely to remain focused on anchoring inflation expectations despite calls for lower borrowing costs.

"While the real estate sector always welcomes lower borrowing costs, preserving economic stability is a larger priority. The housing sector today is driven by genuine end-user demand and improved affordability, making it resilient enough to withstand a temporary pause in monetary easing," he said.