Unchanged RBI Repo Rate Gives Real Estate Buyers and Developers Cost Certainty

Kamlesh Thakur, President of NAREDCO Maharashtra, said the 5.25% rate offers continuity to the housing market, while Kaushal Agarwal, Chairman of The Guardians Real Estate Advisory, expects demand to remain healthy across major micro markets.

Home loan repayments and borrowing costs for real estate developers are expected to remain broadly unchanged after the Reserve Bank of India retained the repo rate at 5.25% and continued with a neutral monetary policy stance.
The decision was taken during the third bi-monthly Monetary Policy Committee meeting of FY27. Real estate representatives said the unchanged rate provides greater cost visibility for homebuyers and developers at a time of global uncertainty, volatile energy prices and continuing concerns around inflation.
Although the sector had expected a rate reduction to improve home loan affordability, industry representatives said continuity in borrowing costs could help maintain buyer confidence and support ongoing residential sales.

Kamlesh Thakur, President of NAREDCO Maharashtra, said, The RBI’s decision to maintain the repo rate at 5.25% while retaining a neutral stance reflects a prudent approach amid global uncertainties and evolving inflation dynamics.
He said unchanged borrowing costs should allow housing demand to retain its momentum, particularly in the mid-income and premium residential segments.
Thakur also referred to the upward revision in India’s GDP growth projection to 6.7% as an indication of resilience in the domestic economy. He said moderation in inflation could create room for a rate reduction in a future policy review.

A future rate cut would further improve housing affordability, strengthen buyer sentiment, and accelerate investments across the residential and commercial real estate sectors, he added.
Kaushal Agarwal, Chairman of The Guardians Real Estate Advisory, said continuity in the policy rate gives buyers greater predictability while evaluating property purchases.
Stable interest rates ensure that home loan EMIs remain broadly unchanged, allowing prospective buyers to make informed purchasing decisions without concerns over rising borrowing costs, Agarwal said.

He noted that housing demand had been supported by end users, rising incomes and confidence in the domestic economy. With GDP growth projected at 6.7%, he expects demand to remain healthy across important real estate micro markets.
Shilpin Tater, Managing Director of Superb Realty, described the unchanged repo rate as a balanced decision in the present global and domestic economic environment.
He said predictable financing conditions allow developers to plan projects with greater certainty while protecting homebuyers from an immediate increase in lending rates.

Demand for quality residential and commercial developments, particularly in well-connected urban locations, is expected to remain robust, Tater said.
Shraddha Kedia-Agarwal, Director of Transcon Developers, said a rate reduction would have improved affordability, but maintaining the existing rate offers reassurance to consumers and developers during an uncertain economic period.
She said demand in the premium and luxury housing markets continues to be supported by aspirational purchases and wealth creation, while genuine end users remain central to the broader residential market.
Stable financing costs, together with the improved economic growth projection, should help the residential market retain its present pace, she added.

Dhruman Shah, Promoter of Ariha Group, said the decision reflects the central bank’s attempt to balance economic growth and inflation management.
He said policy continuity keeps financing conditions predictable for developers and homebuyers. Stable rates, infrastructure investment and continuing urbanisation are expected to support residential sales.
The industry response indicates that the unchanged repo rate may not provide an immediate affordability benefit, but it removes the risk of higher borrowing costs in the near term.

For prospective homebuyers, this means home loan repayments are likely to remain broadly stable. For developers, the decision offers greater visibility while evaluating project financing, construction expenditure and future investments.
The sector will now look towards inflation movements and subsequent monetary policy meetings for indications of whether borrowing costs could decline later in the financial year.

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