The RBI’s monetary policy committee in its April meeting maintained status quo on policy rates, in line with market expectations. This move towards maintaining stability in lending rates bodes well for the real estate sector, which has been consistently growing.

“It provides added support to consumers, ensuring economic growth remains robust. Furthermore, the Governor’s optimism is bolstered by the resilience in domestic macro fundamentals. With the government’s revised GDP growth projection for FY 24 at 7.6%, Manufacturing PMI hitting a 14-year high, strong Services PMI, and high FOREX reserves, sentiment is further uplifted, promising sustained long-term growth for the domestic economy,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.

According to industry experts, this move ensures consistency in interest rates, offering homebuyers assurance of steady loan terms.

Aditya Kushwaha, CEO and Director, Axis Ecorp, said, “With affordable home loan rates, the market beckons new borrowers into a realm of opportunity. The surge in new project launches, housing unit supply, and luxury sales, alongside record property registrations and 7% price appreciation, underscores the robust real estate performance. The luxury real estate sector in the country is experiencing an unprecedented boom fueled by a convergence of factors.”

Affluent buyers seeking exclusive, high-end properties are driving demand to new heights. “This surge is not only evident in metropolitan cities but also in emerging luxury destinations, where discerning individuals seek unique, luxurious living experiences. A steady interest rate regime coupled with increased government infrastructure investments and liquidity management will enable this segment to grow further,” added Kushwaha.

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“By avoiding any further rate hikes, the RBI instills confidence among investors and homebuyers alike, providing a conducive atmosphere for growth and development. This decision holds particular significance for the luxury home market. Luxury properties, less affected by interest rate fluctuations, stand to benefit from this steady environment, facilitating expansion and investment within the segment. Overall, this decision sets a positive tone for the real estate market, fostering a climate of growth, stability, and opportunity,” said Amrita Gupta, Director of Manglam Group and Founder President of CREDAI Rajasthan Women’s Wing.

G Hari Babu, National President of NAREDCO, said, “The RBI’s decision to maintain the repo rate underscores confidence in the nation’s economic fundamentals, setting an encouraging tone for the new financial year. With GDP projected to grow at 7% in FY25, this decision bodes well for sustained growth in the real estate sector. It signifies a conducive environment for economic development and positively impacts both residential and commercial segments. While the current interest rate remains at its highest in four years, we urge the RBI to consider our appeal in its forthcoming review meeting.”

The confirmation of decreasing inflation and improved liquidity fosters a favorable environment for growth, complemented by the resilience of the global economy and domestic expansion.

“This facilitates affordable borrowing, incentivizing developers and homebuyers alike, thereby catalyzing robust growth in the real estate market,” the NAREDCO president added.

Here’s what India’s leading developers said about the impact of the RBI decision on the housing market:

Shiwang Suraj, Director & Founder, InfraMantra: “As the repo rate remains unchanged, the stability it signifies in the monetary policy landscape offers a reassuring foundation for the real estate market. This consistency fosters confidence among investors and homebuyers alike, providing a steady environment for sustainable growth and prudent decision-making in the realm of property investments.”

S.K Narvar, Group Chairman, Trident Realty: “The RBI decision to keep the repo rate unchanged reflects a strategic approach aimed at nurturing economic recovery and fostering stability. This move is set to benefit potential homebuyers by ensuring affordability and sustaining momentum in the housing market. With consumer demand driving the real estate sector, especially in luxury housing, the decision to maintain the repo rate status quo supports feasible macroeconomic indicators and encourages new homebuyers to invest in property. As India’s economy continues to grow, the real estate sector is poised to play a significant role, making the current repo rate policy a crucial factor in fueling positive demand and contributing to the country’s economic expansion.”

Ashish Sharma, AVP Operations, Brahma Group: “The unchanged repo rate indicates a strong and ongoing growth momentum. This prolonged pause for the seventh consecutive time fosters economic stability and confidence, nurturing investment and certainty for businesses. As a result, businesses have greater certainty and are more likely to invest, which in turn encourages sustainable growth. Additionally, homebuyers and developers can make informed decisions with confidence.”

Rajat Khandelwal, CEO, Tribeca Developers: “The RBI’s decision to keep the repo rate unchanged at 6.50% for the seventh consecutive time underlines its support for the residential property sector, showing good sales momentum. The Gudi Padwa celebrations have doubled this year with an unchanged repo rate coupled with the offers from property developers which will lead to increased investment in properties for their dream homes. The continued liquidity and stable lending rates will benefit buyers to upgrade to luxury property in their desired budgets. Gudi Padwa promises to deliver robust sales figures for the industry, and the luxury segment will surely see good demand with increased offers.”

Ankush Kaul, Chief Business Officer, Ambience Group: “RBI has once again satisfied the buyers’ sentiments by keeping the repo rates unchanged at 6.50% for the seventh consecutive time. This will not only stabilize the interest rates for prospective buyers but will also keep the public’s faith in the authorities intact with the elections around the corner. It is a welcome move and we anticipate that the upward trajectory that the real estate sector is sailing on shall continue. This decision shall be beneficial for both borrowers as well as developers bringing an equilibrium in financial volatility.”

Nayan Raheja of Raheja Developers: “The growth trajectory of the realty sector remains positive, consumption is rising, and more and more people are investing in the mid, premium, and luxury housing sectors. The developers, on their part, have increased the pace of new launches, as exhibited by the recent Q1 report. India is firmly on the path of progress, and the decision by RBI to not disturb the pace by keeping the repo rate unchanged will enthuse the sector as it will also provide some relief to borrowers as their EMIs will not rise.”

Yashank Wason, Managing Director, Royal Green Realty: “The stability in the repo rate at 6.5% for the seventh consecutive time underscores the foundation for sustained growth. With the RBI’s commitment to meeting the 4% inflation target and acknowledgment of upside risks, we navigate market dynamics with vigilance, leveraging key policy rates to drive strategic investments and ensure long-term viability.”

Dr. Renu Singh, Director – Sales & Marketing, Aarize Group: “Monetary stability, exemplified by the RBI’s steadfast adherence to the 6.5% repo rate, is a keystone for real estate investments. With the expected decision to maintain the repo rate for the seventh consecutive time, we seize the opportunity to navigate market dynamics, leveraging stability for sustainable growth.”

Pyush Lohia, Director, Lohia Worldspace: “The RBI decision to maintain the repo rate is a strategic victory for real estate developers, including those focusing on tier-2 cities. The stability it brings creates a conducive environment for investment. The acknowledgment of decreasing inflation and improved liquidity further boosts confidence. Additionally, the sustained global economic resilience and expanding domestic activity signal growth opportunities in tier 2 cities too. This decision facilitates affordable borrowing, encouraging developers to initiate projects and enabling homebuyers to invest. It is a promising outlook for real estate development.”

Aman Gupta, Director, RPS Group: “RBI’s decision hence incorporates homeowners with affordable rates and relief in the standpoint of the rising housing costs. The consumers are happy with the maintenance of repo rate since this is an assurance which they consider any addition to their pie charts, portfolios, and accounts to be good either way. The decision serves as the pillar of sustainable growth of the housing industry over the long-run term and generates a speculative mood in the current housing environment. Familiarity of the market which indicates that the investment may return as many profits as they expect allow purchasers to pass everything confidently through the market.”

LC Mittal, Director, Motia Group: “The RBI has proved its competence and rationality of its monetary policy once again as it has held the repo rate without any change for the seventh time since the last meeting. There is a considerable improvement in credibility and confidence of an average home buyer when a repo rate is stable and predictable. With this assurance, home loans become a realisable dream. This stability further indirectly results in a positive contagious effect on the real estate sector thereby contributing immensely to the Indian economy. thus supporting the GDP as well as future growth prospects.”

Sanjoo Bhadana, Managing Director of 4S Developers: “The MPC’s accommodative stance, which includes keeping the repo rate at 6.5%, reflects its commitment to sustaining economic growth in the face of global headwinds. With inflation on a controlled glide path until 2023, maintaining momentum seemed reasonable before conclusively controlling price-rise pressures. For real estate, the pause in further rate hikes brings only temporary relief, since house loan rates remain elevated following the cumulative 250 basis point increase last year. As we proceed through 2024, the transmission of these cumulative hikes to bank lending rates will become more significant, affecting mortgage serviceability and affordability.”

Anurag Goel, Director at Goel Ganga Developments: “A lower repo rate will help banks to borrow money from the RBI at low interest rates which eventually will keep the interest rates of banks also lower. This move would help property buyers to reap the benefits of a record-low interest rate regime. The increase of rising demand in the real estate sector is already showing the signs of recovery and with the recent rate cuts it would entice more buyers to get loans from the banks which can be a pivotal factor in the resurgence of demand giving the real estate sector industry the much needed boost.”

Gurpal Singh Chawla, Managing Director, TREVOC: “The Indian real estate sector has been strengthening over the past few years, and amidst this, the RBI’s decision to maintain the repo rate at 6.50% will benefit the sector. Over the last few years, the premium and luxury segment has witnessed an upsurge in sales. Buyers are keen to invest in the luxury housing sector, which has paved the way for the launch of new projects in this segment. Considering the upcoming festive season that will witness outstanding customer engagement, we anticipate this decision will benefit luxury real estate.”

Ashwani Kumar, Pyramid Infratech: “The RBI decision to keep the repo rates unchanged at 6.50% will benefit developers and prospective buyers looking forward to investing in the sector. As there will be no increase in loan interest rates, it would bring them relief. Further, the government’s stand to balance inflation would give them additional benefits. This stability is anticipated to boost both the residential and commercial real estate sectors, opening compelling investment opportunities for buyers of all segments.”

Pawan Sharma, MD, Trisol RED: “As interest rates stay constant, we anticipate increasing buyer confidence and continued interest in the industry. The sector has already been performing well over the last few years, and the decision to keep the repo rate unchanged will benefit both the prospective buyers and developers.”

Vidush Arya, Head-Strategy, Orris Group: “We welcome RBI’s decision to maintain the repo rate at 6.50% for the seventh consecutive time. Once again, this decision is anticipated to positively impact the commercial and residential real estate sectors. Potential buyers in both sectors will benefit from this move as there will be no increase in loan interest rates. This step will take the sector to new heights, relieving buyers and developers and opening the gateway to launch projects in emerging areas of interest.”

Saransh Trehan, Managing Director, Trehan Group: “Given the burgeoning consumer demand in the real estate sector, particularly in luxury housing, maintaining the status quo on the repo rate appears logical and aligns with favorable macroeconomic indicators. This decision is likely to encourage prospective homebuyers to flock towards property investment opportunities, taking advantage of reduced home loan EMIs. The declining inflation and steady GDP growth are pivotal factors bolstering the overall demand in the real estate market. As India positions itself as the world’s fifth-largest economy, with aspirations to ascend to the third position in the future, the real estate sector is poised to significantly contribute to this trajectory.”

Shiven Vikram Bhatia, Executive Director, Splendor Group: “The RBI decision to maintain the status quo on repo rates is geared towards reinforcing economic recovery and encouraging banks to offer favorable home loan terms to stimulate housing demand. This decision is expected to inspire confidence among developers and homebuyers alike, allowing banks to offer more appealing rates to boost housing demand. However, considering the inflationary pressures, banks may exercise caution in reducing rates excessively. The stability in borrowing rates will be beneficial for potential homebuyers, thus promoting increased demand within the real estate sector.”

Dushyant Singh, Director, Orion One 32: “By refraining from rate adjustments, the central bank aims to provide stability while incentivizing banks to offer attractive home loan packages, thereby revitalizing the housing market. This deliberate action is expected to infuse positivity into the real estate sector, creating a favorable environment for both developers and prospective homeowners. While the decision supports the objective of boosting housing demand, it also acknowledges the necessity of proceeding cautiously amidst inflationary pressures. The deliberate stance on borrowing rates is set to favor potential homebuyers by ensuring affordability and sustaining momentum in the real estate sector.”