In its post-election RBI policy announcement, the MPC opted to maintain the repo rate at 6.5% for the eighth successive time. The RBI’s cautious stance reflects acknowledgment of persistent food inflation alongside a robust growth trajectory, evident in the revised growth forecast for FY25, now elevated to 7.2% from 7%.

“This move by the RBI ensures stability in interest rates for prospective homebuyers in the short term. Nevertheless, the potential necessity for a downward revision of the repo rate remains pivotal for fostering future sectoral growth, particularly amidst mounting concerns over escalating property prices impacting a significant portion of genuine homebuyers across India,” said Dhruv Agarwala, Group CEO, Housing.com & PropTiger.com.

Developers say that by keeping the inflation projection steady and maintaining the repo rate at 6.5%, the central bank is signaling its dedication to bolstering the economy and maintaining stability. This is particularly encouraging for both luxury and affordable housing developers.

Also Read: Your home loan EMIs may not come down soon as RBI keeps repo rate unchanged

G Hari Babu, National President of NAREDCO, said, “For the average homebuyer or developer, this is excellent news. It implies that borrowing costs will stay relatively affordable, potentially prompting more individuals to consider property investment. Moreover, with core inflation easing and fuel prices decreasing, consumers may find themselves with extra funds to allocate towards a down payment or home enhancement venture.”

Additionally, “the commitment to stability extends to sustainable practices within the housing sector. Developers are increasingly embracing environmentally-friendly initiatives, which not only align with global sustainability goals but also appeal to socially conscious buyers. This alignment with sustainable development objectives further enhances the attractiveness of real estate investments,” he added.

Here we take a look at developers’ views on the RBI policy outcome:

Yashank Wason, Manging Director, Royal Green Realty: “This move will keep the momentum of real estate going on. Housing sales across the country, including Delhi NCR, have been phenomenal in the last few quarters. The unchanged repo rate will boost the confidence of homebuyers to purchase properties and give breathers to home loan borrowers. The consistent stand of RBI will give stability to the real estate sector and its growth will significantly add traction to the country’s growing GDP and promising future prospects.”

Abhishek Trehan, Executive Director, Trehan Iris: “This move aims to bolster the sector’s momentum, potentially increasing demand for housing, especially luxury properties. As India’s economy continues to grow, the real estate sector is positioned to have a significant impact on the country’s development, and the RBI’s repo rate policy will play a crucial role in driving that growth forward.”

Vipin Sharma, Founder & Chairman, Aarize Group: “We believe that India’s growth at 8.2% in FY 2023-24 is an outcome of the initiatives made for Viksit Bharat by 2047; the growth trajectory is predicted to continue and strengthen in the future. This stability in loan rates promotes current and future real estate investments, hence improving sector growth. Therefore, we are committed to use this growth boost to meet the increasing demand for residential and commercial spaces.”

Varun Sharma, Founder & MD, MVN Group: “The RBI’s prudent decision to keep the repo rate unchanged will instill confidence in homebuyers and investors, providing a significant boost to the real estate market by fostering a climate of growth and stability. This move will especially benefit the luxury housing segment, where demand for exclusive high-end properties is set to soar, driving growth not only in metro cities but also in emerging luxury markets across India.”

Santosh Agarwal, CFO and Executive Director, Alphacorp: “This stability aids in managing borrowing costs, benefiting home buyers with predictable loan rates and stable EMIs, thus making homeownership more accessible. Investors can also expect steady returns, boosting confidence in the real estate market. Developers will benefit from stable borrowing costs, enabling efficient project completion and a steady supply of residential and commercial spaces. Going forward, we plan to expand our projects to meet the rising demand. The current monetary policy and economic growth create favourable conditions for ongoing development in construction and real estate, aligning with our goal of providing high-quality spaces that meet customer requirements.”

Rajat Khandelwal, Group CEO, Tribeca Developers: “The RBI announcement to keep the repo rate at 6.5% gives optimism to the property sector. With interest rates remaining stable, home loans will continue to remain accessible and affordable, allowing the market to expand further. This development is expected to create more confidence among buyers and trigger positive trends in home buying. As a result, it is expected to stimulate additional property investment, boosting its growth and strengthening the Indian economic landscape.”

Harinder Singh Hora, Founder Chairman, Reach Group: “These are great times both for the economy and the real estate sector including the commercial segment. The decision by RBI to keep the repo rate unchanged will bring cheers to the market. The world sees immense possibilities in India and the growth trajectory is high. The GDP numbers are also expected to get better and the real estate share in the GDP percentage is rising. Altogether, RBI’s decision will boost real estate investments.”

Gurpal Singh Chawla, Managing Director, TREVOC: “By maintaining the repo rate at 6.50% for the eighth consecutive time, the RBI has demonstrated a commendable initiative for buyers. This decision not only stabilises interest rates for potential buyers but also reinforces public confidence in the government. It’s a positive step, and we are optimistic that the real estate sector will continue to grow rapidly. Both developers and buyers stand to benefit from this measure.”

Manoj Gaur, President-CREDAI NCR, and CMD-Gaurs Group: “Even though a marginal reduction in the repo rate would have further raised the real estate sector’s spirit, we welcome RBI’s announcement not to change the interest rate. One area of concern is the affordable housing segment, which definitely requires an intervention. Overall, this is a welcome decision, and the real estate market, with an all-time low unsold stock and experiencing an all-time boom, welcomes this move. The decision supports the growth and stability of the sector.”

Prateek Tiwari, MD, Prateek Group: “The RBI has made a welcoming move by keeping the repo rates unchanged at 6.50%. This move benefits developers and prospective buyers looking forward to investing in the sector. Further, it would bring them relief in terms of loan interest rates. The real estate sector is witnessing healthy growth momentum, thus improved market sentiments and economic dynamics along with the stability in interest rates will augur well for the sector’s growth momentum.”

Uddhav Poddar, Managing Director, Bhumika Group: “The decision to maintain the RBI’s repo rate is an extremely positive step for homebuyers and investors. By keeping the rate stable for the eighth consecutive time, the RBI has indicated strong confidence in the real estate sector and homebuyers. This will not only help in balancing inflation but also inject new energy into the real estate market, marking a moment of joy for homebuyers and investors.”

Gurmit Singh Arora, National President, Indian Plumbing Association: “While the continuation of the status quo regarding the repo rates by the RBI benefits home buyers in some aspects, it also bears some drawbacks. That being the case, although the maintained status has given an illusion of stability and market predictability in the housing loan market, the long-drawn high-interest rate regime is driving the expenses up in terms of affordability. The potential homeowners are now left in a very unenviable position of having to either spend a percentage of their monthly salary which might be more than what they previously had to borrow or having to adjust their expectations of homeownership with the hope that the interest rate will become slightly more reasonable in the future. But for the consumers who already had home loans, the monetary policymaker’s conservative policy decision allows a temporary relief against mounting EMI pressures, even as the economy is passing through tough phases.”

LC Mittal, Director, Motia Group: “The RBI’s strategy to wait and watch before initiating further rate cuts is well-appreciated, especially in the light of the eagerly-awaited union budget that is expected to shed light on fiscal policy. To home buyers, this cautious stance means a higher borrowing cost period that continues to undermine the constrained demand for property in the real estate market. As much as the industry expected the RBI to cut the rates to boost housing consumption, the latter’s priority lies in curbing inflation and maintaining financial stability. Consumers that buy homes now experience the dilemma of either delaying their decision on their mortgages or handling more expensive EMIs.”

Subhash Goel, MD, Goel Ganga Developments: “This decision shows that the RBI is alert to inflation threats – the key reason why it has kept the repo rate constant – despite portraying an upbeat economic growth picture. While this policy stance makes much macroeconomic sense, it also presents efficacious challenges for prospective homeowners. As the cost of borrowing offset remained high, the affluence of attaining homeownership continues to remain a mirage to several, especially within the affordable housing space.”

Aman Gupta, Director, RPS Group: “As for home buyers, such an approach may also have mixed implications: the risks and opportunities will depend on the possibilities of continuing the decline of interest rates for a long time. In turn, even if the current set of bargaining factors such as high interest rates significantly slow the overall housing demand, they do offer an opportunity for those within the financial capacity of attaining a more favorable loan interest rate before any further increase. While some home buyers might be waiting for the prices of new properties to come down, others might be looking forward to take advantage of the slow market, to bargain for better prices with the developers involved.”

Gaurav Kansal, Director, KBP Group: “The government has signed new luxury housing projects to meet the consumers’ demand for high-end property; it will stabilize macroeconomic factors and engage new customers. It has been seen that with the boom in the Indian economy, the contribution made by the real estate sector is huge. Hence the current repo rate policy will help in stimulating demand and strengthening the growth.”

Anantharam Varayur, Co-Founder, Manasum Senior Living: “With core inflation moderating and fuel prices stabilizing, there is a positive outlook for the economy, which could boost confidence among seniors and their families looking to invest in such projects. The unchanged repo rate provides much-needed stability, ensuring that borrowing costs for developers remain steady. This predictability in interest rates could attract more investment into senior living projects, as developers can plan their finances more effectively. Besides, the RBI’s commitment to achieving a durable 4% inflation target and ensuring price stability sets a strong foundation for sustained growth in this sector. As the economy continues to recover, the demand for senior living residential options is likely to rise, offering promising prospects for these projects in the long term.”

Pyush Lohia, Director, Lohia Global: “Stability or further easing in the rate by the RBI would be a significant boost, enhancing buyer confidence and making housing loans more affordable. This is crucial for sustaining the momentum in home buying that we’ve observed post-pandemic, particularly in the burgeoning markets of tier 2 cities. We are particularly attentive to how the MPC addresses the ongoing inflation pressures and their impact on borrowing costs. A balanced policy that supports economic growth while managing inflation is essential for the health of the real estate sector. Moreover, we look forward to initiatives that could support the real estate sector in addressing the supply chain disruptions and escalating raw material costs, which are significant concerns for developers.”

Saransh Trehan, Managing Director, Trehan Group: “We welcome the RBI’s announcement to maintain the repo rate’s status quo and wish that the balanced approach brings scalable results. In the purview of real estate demand, the home-buying appetite has soared in the past few years, with luxury housing markets profoundly witnessing a demand upshift, despite successive maintenance of repo rates. While high-end home buyers continue to indulge in real estate investments, mid-segment, and affordable property buyers might take a sabbatical due to high home loan mortgage rates induced because of unchanged repo rates.”

Dushyant Singh, Director, Orion One 32: “Demand for housing will continue to witness an all-spectrum growth. While we would have been jubilant had the RBI inclined towards the reduction in repo rates, we respect its decision to keep the repo rates unchanged to tackle retail inflation. By maintaining stable interest rates, the central bank seeks to provide stability and encourage banks to offer competitive home loan packages, thus revitalizing the housing market. This strategic move is anticipated to inject positivity into the real estate sector, benefiting both developers and prospective homeowners. While the decision aims to stimulate housing demand, it also recognizes the importance of cautious progress amidst inflationary pressures. This careful approach to borrowing rates is designed to benefit potential homebuyers by ensuring affordability and sustaining momentum in the real estate market.”

Ravi Saund, Founding Director, Empirium Private Limited: “As a real estate developer, we understand the RBI’s cautious approach in maintaining the status quo on interest rates amidst the current political dynamics. While we were hopeful for a rate cut to stimulate market activity, we acknowledge the importance of a stable economic environment. The presentation of the full budget in July will provide a clearer direction for the financial landscape. Meanwhile, we remain committed to delivering quality projects and are optimistic about the long-term growth prospects of the real estate sector. We are confident that a well-structured budget will address key industry concerns and drive sustained economic progress, benefiting both developers and consumers alike.”

Sarthi Goel, CEO, Civitech Group: “Stability in the repo rate can ensure that home loan interest rates remain low, making it affordable for potential home buyers. It will also stabilize lending rates, allowing both developers and home buyers to benefit from increased confidence and predictability in the market.”

Himanshu Garg, Director, RG Group: “This is a good decision as the repo rate directly impacts lending rates, so an unchanged repo rate means that existing loans will remain benchmarked to the higher repo rate of 6.50, while new loans are likely to be given at lower rates than old loans. This will benefit both the current and prospective homebuyers.”