Home builders and buyers both tend to pay close attention to each announcement by the Reserve Bank of India (RBI), and with good reason. After all, the impact on the rates for funding real estate purchase transactions also affects market sentiments to a great extent.
Commenting on the RBI’s recent decision to retain the repo rates at 5.5%, Dr Niranjan Hiranandani, Chairman, NAREDCO, explained, "The 100 bps reduction in the repo rate earlier this year, coupled with competitive home loan offers by banks at rates as low as 7.30%, has effectively been transmitted across the market—helping home buyers reduce borrowing costs and boosting affordability. The Reserve Bank’s decision to maintain the repo rate ensures stability, keeping EMIs and interest burdens unchanged, and providing much-needed confidence to homebuyers. This stability, combined with festive offers from lenders and developers amidst sustained housing demand, creates an ideal environment for potential homebuyers to act on their aspirations. The ongoing momentum in the real estate sector, driven by new project launches during the auspicious festive season, is expected to spur economic activity, enhance consumption, and contribute significantly to broader economic growth."
G. Hari Babu, National President, NAREDCO, opined, “The decision to keep the repo rate at 5.5% alongside the projected real GDP growth of 6.8% is welcome. However, just as the government has boosted various sectors by cutting GST, a reduction in the repo rate is needed to energise the real estate sector. We urge the RBI to consider bringing the repo rate below 5.5% in the next MPC meeting. Lower interest rates will strengthen homebuyers’ confidence, increase housing demand, and particularly benefit the affordable housing segment. Supporting industries linked to real estate such as cement, steel, electricals, piping, and interiors will also see growth.”
According to him, a cut in repo rate will reduce EMIs on housing loans, enhance the purchasing capacity of middle-class families, and give further momentum to government missions like ‘Housing for All.’ Real estate is the second-largest employment-generating sector in the country. Lower borrowing costs will encourage new projects, attract investment, and create large-scale employment opportunities across allied industries as well.
Prashant Sharma, President, NAREDCO Maharashtra, termed the RBI’s decision to keep the repo rate unchanged at 5.5% with a ‘neutral’ stance as a welcome step for the real estate sector, especially during the festive season when home buying sentiment is at its peak.
“The rationalisation of GST will provide a much-needed push to consumer confidence, offsetting inflationary concerns arising from global trade headwinds such as the additional US tariffs. With GDP growth projections revised upward to 6.8%, the overall economic outlook remains positive, and this will translate into healthier housing demand across segments,” he emphasised.
Vikas Jain, President, NAREDCO Maharashtra NextGen, underlined that “The RBI’s unchanged repo rate is in line with market expectations and will help sustain housing demand during the festive season.”
