As widely expected, the Reserve Bank of India (RBI) on Wednesday held the repo rate steady at 5.5% during its latest monetary policy review, after three successive rate cuts earlier this year.
With inflation showing signs of softening and GDP growth projected at 6.5%, the central bank’s pause has triggered mixed but largely positive reactions from India’s real estate sector.
Real estate sector experts believe this policy continuity offers affordability and predictability — key drivers for housing demand, especially in the affordable and mid-income segments — as the festive season approaches.
Realty players welcome ‘stability’ in monetary policy
Stability in monetary policy augurs well for homebuyers and real estate developers, particularly in the affordable and mid-income segments, says Vimal Nadar, National Director and Head of Research, Colliers India. “The lowering of interest rates in the recent past is expected to be fully passed on to the end users in upcoming quarters, who are likely to benefit from reduced financing costs. With the festive season approaching, developers can further capitalize on this momentum with timely project completions, new launches and festive offers & discounts.”
Shishir Baijal, Chairman and Managing Director, Knight Frank India, says, “The RBI’s decision to hold rates steady underscores its calibrated approach amidst a complex economic backdrop… For the real estate sector, the continuation of stable policy rates and surplus liquidity conditions provide much-needed predictability and helps preserve affordability for homebuyers.”
Many experts also noted that the transmission of earlier repo rate cuts is still in progress. While some banks have already slashed home loan rates, more are expected to follow suit. The onus now falls on lenders to ensure that these benefits reach the end users.
“The onus now squarely falls on the banks to enhance the transmission of previous rate cuts, ensuring that the benefits of lower interest rates are fully passed on to homebuyers,” remarked Piyush Bothra, Co-Founder and CFO, Square Yards.
The RBI’s neutral policy stance, backed by stable urban demand and strong consumption trends, has lent confidence to the housing sector.
Experts see momentum in home buying cautiously positive
“We believe the momentum in home buying will remain cautiously positive—much like the RBI’s approach, balancing domestic resilience with global uncertainties,” stated Amit Goyal, MD, India Sotheby’s International Realty.
Developers, meanwhile, are expected to remain optimistic about new launches, especially in emerging corridors where buyer demand is showing resilience.
“While a rate cut could have further lowered home loan interest rates—encouraging more first-time buyers and end-users to enter the market—the current environment still supports growth,” said Prateek Tiwari, Managing Director, Prateek Group.
According to Samir Jasuja, Founder & CEO of PropEquity, although the RBI has cut repo rate by 100 bps in 2025 to 5.5%, housing sales have come down from their peak.
“Housing sales in India’s top 9 cities fell by 17% YoY in H1 2025 to 2.08 lakh units and sales value fell by 10% to Rs 2.94 lakh crore. Launches have also declined by 18% YoY in H1 2025 to 1.99 lakh units.”
Despite the dip in new launches and sales, experts say a steady policy rate helps maintain buyer confidence, a critical component of the sector’s long-term momentum.
“The consistency will help anchor buyer confidence and indirectly benefit the real estate sector,” said Mayank Jain, CEO, KREEVA.
The NCR market, in particular, continues to exhibit strength driven by lifestyle aspirations, infrastructure growth, and demand for larger homes.
‘NCR real estate market is on a strong footing’
“The NCR real estate market is on a strong footing and the demand continues to be strong with the region’s growing lifestyle aspiration, massive infrastructure development and demand for bigger homes leading to a surge in luxury housing,” said Shiwang Suraj, Director & Founder, InfraMantra.
With the festive season on the horizon, experts suggest developers are in a position to further capitalize on this momentum. Timely project completions, new launches, and festive offers are expected to drive buyer interest and sustain sectoral momentum.
“With the festive season approaching, developers can further capitalize on this momentum with timely project completions, new launches and festive offers & discounts,” said Vimal Nadar, National Director and Head of Research, Colliers India.
Overall, while a further rate cut might have added more fuel to the recovery, the RBI’s cautious and steady approach continues to offer a strong foundation for the real estate sector’s growth in the second half of 2025.