RBI Repo Rate Unchanged; Indian real estate stays optimistic ahead of Festive Season
The Reserve Bank of India (RBI) in its latest bi-monthly Monetary Policy Meeting (MPC) kept the repo rate unchanged at 5.25%. The decision was taken considering the volatile energy prices amidst geo political scenario, which affects economies at the domestic and international levels. Amidst geopolitical uncertainty, India's FY27 GDP growth is projected at 6.7%, supported by resilient domestic demand, with CPI inflation projected at 5.0%.
While the stable repo rate is expected to boost confidence among homebuyers, developers feel concerned over rising input costs. Industry experts fear that the additional burden of increased construction costs may be pushed on buyers. The concern arises as India gears up to welcome the festive season ahead.
The RBI’s decision to keep the repo rate unchanged is seen as a move to boost housing sales ahead of the festive season. It is the busiest time of the year for Indian real estate, as it is believed to be an auspicious time to make a property purchase.
However, the affordable housing segment remains sensitive to home loan interest rates. The average residential prices across top cities in India have risen by 7 percent annually. Therefore, a stable repo rate alone cannot withstand strong buyers’ momentum in Indian real estate.
The stable interest rate is expected to support growth in residential properties in H2 2026, particularly between mid-income and premium housing segments.
India follows a Cautious Approach – Sanjay Malhotra, Governor, Reserve Bank of India said
RBI Governor Sanjay Malhotra said that, amidst international trade policy shifts and inflation paths Indian follows a cautious approach.
Sanjay Malhotra, RBI Governor said, “Growth, although resilient, is expected to be lower in this financial year. The outlook, however, is hazy because of the uncertainties regarding South’s global trade policy. There is a need for greater clarity to emerge, especially regarding inflation, its path and composition before taking any policy action.”
Real Estate Sector welcomes Unchanged Repo Rate
“Real estate is a long-gestation sector, and homebuyers make long-term financial commitments. A stable interest-rate environment enables both developers and buyers to plan with greater certainty,” said Shekhar Patel, President, CREDAI.
He further said, “Despite supply-side disruptions in recent months due to the situation in West Asia, the housing market has continued to demonstrate remarkable resilience, reflecting strong underlying demand. Stable borrowing costs further support this momentum by providing financing certainty and facilitating timely project execution.”
The consecutive pattern of unchanged repo rates brought joy to the Indian real estate sector. This stability is much-needed to boost market activity amidst the global scenario. A steady repo rate sends an optimistic signal to both buyers and developers in the market.