The RBI on Wednesday kept the repo rate unchanged for the 10th consecutive time, reflecting a prudent and balanced approach to monetary policy. This decision comes against the backdrop of easing inflation since December 2023, which has been hovering within the RBI’s target band.

“While a rate cut would have been favorable for the real estate sector, further boosting home buyer sentiment in conjunction with the upcoming festive season and reducing borrowing costs, the status quo is not expected to negatively impact the market’s current momentum. The change of stance to neutral is early indicator of the change in the interest rate policy going forward,” said Dr Samantak Das, Chief Economist and Head – Research and REIS, India, JLL.

The residential real estate sector has adapted to the prevailing interest rate environment and continues to show robust performance with sales in the first nine months of 2024 already at 85% of 2023 full year numbers.

“With the sentiment likely to sustain and further strengthen over the upcoming festive season, the year is expected to close with sales reaching yet another historic milestone, 12-15% higher than 2023 sales,” added Das.

Also Read: RBI Holds Repo Rate: What are the best home loan options for homebuyers?

G Hari Babu, National President of NAREDCO, said, “Although interest rates remain high, we suggest that RBI consider reducing rates in the next MPC meeting, but first assess its impact. This will further stimulate economic growth, increase housing demand, and boost investment in the real estate sector. We believe this decision will boost investor confidence, encourage housing demand, and support the overall development of the real estate sector. With India’s real GDP growth projected at 7% and inflation estimated at 4.5%, we are optimistic about the sector’s prospects.”

Here’s what India’s leading developers said about the RBI decision to keep the repo rate unchanged:

Mohit Goel, Managing Director, Omaxe: “The RBI decision to maintain the repo rate at 6.5% is a prudent move that will provide much-needed stability to the housing market, especially during the festive season. Unchanged home loan rates will help sustain buyer interest and preserve the positive sales momentum we have seen in recent months. While a rate cut would have been an ideal boost, the RBI’s cautious stance reflects its commitment to managing inflation and supporting overall economic growth in a challenging global environment. This decision will help keep the housing sector on track, enabling more homebuyers to realize their dreams.”

Abhishek Trehan, Executive Director, Trehan Iris: “As real estate developers, we view the RBI decision to keep the repo rate unchanged at 6.5% for the tenth consecutive time as a strategic move that will enhance stability in the real estate sector. This policy creates an enabling environment for growth, which we believe will stimulate the market and boost demand, particularly for luxury properties. With India’s economy continuing to rise, the real estate sector is well positioned to make a substantial contribution to national growth. Moreover, this decision greatly benefits homeownership and prospective buyers. By keeping borrowing costs low, individuals can more easily finance their dream homes, enhancing access to residential properties. Additionally, this shift will encourage and strengthen the housing market, creating a more vibrant and dynamic real estate market.”

Ashish Sharma, AVP Operations, Brahma Group: “This commendable move effectively balances the need for inflation control with the goal of promoting economic growth. Moreover, for the real estate sector, this stability is particularly significant, as it promotes an environment conducive to investment and expansion. With lower borrowing costs, businesses can better manage their expenses and seek new opportunities, leading to increased demand. This positive outlook reinforces our dedication to creating innovative developments that align with evolving market demands.”

Aman Sarin, Director & CEO, Anant Raj Ltd: “The RBI decision to keep the repo rate unchanged was expected, considering ongoing inflation concerns and global geopolitical uncertainties. However, with each MPC meeting, the likelihood of a rate cut increases, and we could see one in the coming reviews if current improvements continue. Currently, home loan interest rates hover around 9.25%, a level that remains manageable for many borrowers. Also, given the stable rates for over two years, real estate demand has consistently grown, fueled by rising incomes, lifestyle upgrades, and economic growth. We are already seeing strong demand this festive season, which is likely to continue, regardless of any changes in interest rates.”

Raoul Kapoor, Co-CEO, Andromeda Sales and Distribution Pvt Ltd: “The RBI decision to keep the repo rate unchanged wasn’t a surprise, though many expected a rate cut, which could have boosted retail loan demand during the festive season. However, lending institutions are stepping up with festive offers. For example, SBI is offering car loans starting at 9.05% interest with zero processing fees, providing borrowers with significant savings. HDFC Bank has launched its ‘Festive Treats’ campaign, with car loans starting from 9.40% interest and up to 100% financing on select models, along with special cashback and down payment discounts. These offers are aimed at capitalizing on the festive demand and helping customers secure better deals.”

Mohit Jain, Managing Director, Krisumi Corporation: “The apex bank’s stance to keep the rates unchanged for the tenth consecutive time is on the expected lines. While the real estate industry was hoping for an interest rate reduction, a status quo is the next best outcome for the industry. Stable rates ensure consistent EMIs, giving homebuyers the confidence to plan their purchases. Furthermore, the expectation of potential rate cuts in the coming months is also boosting optimism in the real estate market and we expect the robustness in demand to continue over the next few years.”

Aman Sharma, Managing Director of Aarize Group: “The RBI decision to keep the repo rate unchanged at 6.5% is a strategic move that ensures stability. With borrowing costs maintained, we expect sustained momentum in the residential and commercial real estate markets. Affordable financing will continue to attract homebuyers, while developers can manage costs effectively. This move supports growth across residential, commercial, and retail segments, encouraging more investments and ensuring long-term market confidence. It’s a positive signal for sustained expansion in the real estate industry.”

Yateesh Wahaal, Director, M3M India: “The decision to keep the repo rate unchanged at 6.5% by the RBI is a positive move for the real estate sector. It ensures that home loan interest rates remain attractive, which will help sustain the demand for both residential and commercial properties. Additionally, with inflationary pressures under control, this steady rate environment allows developers to plan their projects and pricing strategies with greater confidence. The unchanged repo rate reinforces the government’s commitment to economic growth, and we anticipate continued momentum in the real estate market as a result.”

Santosh Agarwal, CFO and Executive Director of Alphacorp Development Pvt Ltd: “The RBI decision to maintain the repo rate at 6.5 per cent brings much-needed stability to the overall real estate market. In the first half of 2024, the sector witnessed a 11 per cent rise in housing sales, and with interest rates remaining steady, this momentum is likely to continue. The unchanged rate provides relief to developers by keeping financing costs stable, while also benefiting homebuyers with affordable loan rates. This steady repo rate reinforces the sector’s growth trajectory as it aligns with India’s long-term economic recovery and development goals.”

Sanjay Sharma, Director, SKA Group: “By keeping the repo rate stable at 6.50% during the festive season, the RBI has once again met buyers’ expectations. This will not only stabilize interest rates for potential buyers but also boost purchases during the festive period. This is a welcome step by the RBI, and we hope that the rapid growth of the real estate sector will continue. This decision will prove beneficial for both buyers and developers.”

Ravindra Gandhi, Founder and Managing Director of Tirasya Estates: “The RBI decision to keep the repo rate unchanged, shifting its stance to neutral, is encouraging news for the real estate market, benefiting both buyers and developers. This announcement has come around at a time when the sector is experiencing renewed energy, expanding into new regions and enhancing its offerings. This signifies stability in India’s economy, especially amidst global challenges. This status quo could also pave the way for potential rate cuts in the future, fostering greater optimism. However, we remain concerned about the affordable housing sector and hope the RBI will address its challenges in the upcoming reviews.”

Uddhav Poddar⁩, CMD, Bhumika Group: “The economy has significantly strengthened over the past few years, with the real estate sector contributing to this recovery. The RBI decision to keep the repo rate constant will strengthen confidence in both commercial and residential real estate investors and buyers, significantly contributing to India’s GDP and future growth prospects. Further, as RBI has kept its stance neutral, the sector looks forward to a cut in the repo rate in the future. Thus, amid this steadiness, we anticipate more fruitful opportunities for buyers and developers.”

Prateek Tiwari, MD, Prateek Group: “By acquiring a neutral stance, the announcement indicates future rate cuts. Amidst the rise in housing demand, less volatility in the loan rates would instil greater confidence in the buyers and developers, welcoming long-term growth. This stability in the interest rates will notably encourage first-time homebuyers and boost the growth in the entire sector. However, the affordable housing sector is one area of concern, and we hope that RBI will cater to these concerns in the following announcements.”

Manit Sethi, Director, Excentia Infra: “The RBI decision to maintain the status quo on the repo rate for the tenth consecutive time is a welcome move. It aligns with the country’s growth prospects and rapid infrastructural development. This stability benefits all stakeholders in the real estate sector—homebuyers, developers, and financial institutions alike — and encourages real estate development in tier 2 cities.”

Nandni Garg, Director, Rajdarbar Ventures: “Since the real estate sector witnessed a surge in demand for luxury residential properties, the repo rate stability will again be advantageous for the sector. This will boost and enhance the demand for residential properties and enable developers to create more projects that meet buyers’ needs. Additionally, stable home loan rates will provide significant relief to prospective homebuyers. As luxury housing continues to gain traction, this stability will likely enhance buyer interest in luxury real estate, motivating developers to create more projects.”

Manik Malik, CFO, BPTP: “The RBI’s decision to keep the repo rate unchanged is a positive move for the real estate sector. With inflation under watch, stable interest rates help developers manage financing costs and plan projects more confidently. For homebuyers, it means home loans remain affordable, keeping demand strong in the housing market. This decision boosts buyer confidence and supports the ongoing recovery in real estate. Additionally, with interest rates in the US going down, we expect interest rates to soften in India in the coming quarters as well, which could further benefit the sector.”

Gurmit Singh Arora, National President, Indian Plumbing Association: “Though this stability in rates provides some breath to the present borrowers especially the schul creditors, this is a far shot from the sort of demand which an easing in the rates could have provided especially to the real estate space. The stable forecast on the GDP growth and inflation rates for FY25 still entails the possibility of India’s growth recovery over the medium-term based on prudent assumptions. However, the concern regarding the swelling enthusiasm in the property market that was sought before the holiday season might remain unfulfilled. Barring those two strategies, it seems homebuyers and of course new home owners will have to contend with this moderate rate environment either by way of new market innovations or cash inducements and adjusted value proportions in order to spark actions in real estate sales and purchase transactions.”

Anurag Goel, Director at Goel Ganga Developments: “On the one hand, it offers a stable environment in which planning and investment may be conducted over the long term. On the other, it deprived the market of the increased demand which a rate cut could have delivered during the all-important festive period. There is no change in GDP and inflation estimates for FY25, indicating faith in the do-nothing policy. However, volumetric parameters in strategy may need to be revisited by property market stakeholders as interest rate cut policies are likely to be absent.

LC Mittal, Director, Motia Group: “The RBI decision to keep the repo rate unchanged for the tenth time at 6.5% is acknowledged to be a reasonable move under the current circumstances given high inflationary tendencies. The shift to a neutral stance signals the RBI’s commitment to aligning inflation with growth, ensuring that the market conditions remain favorable for sectors like real estate. As for the lack of a hinge to echo any change in borrowing rates, we perceive home loan EMIs currently to remain steady, which would, in turn, positively impact demand in the housing market.”

Aman Gupta, Director, RPS Group: “The RBI’s neutral stance after a prolonged period of holding the repo rate at 6.5% indicates a cautious yet optimistic approach towards managing inflation and growth. In addition, while this decision reduces volatility in borrowing rates which are of concern to real estate contractors and individuals, it also calls for budgeting because the threat of inflation still exists. We believe this move will help maintain confidence in the housing sector, but continuous vigilance is required to adapt to any shifts in the economic landscape.”

Keshav Mangla, GM-Business Development, Forteasia Realty Pvt Ltd: “Like every other major financial institution in the world, the RBI has experienced criticism for its decision to keep the repo rate unchanged at 6.5%, the tenth such posture in a row, while easing the stance to neutral. Such policy directed at mitigating growth in the economy versus controlling inflation has its consequences on the real estate market. For instance, the result of stable interest rates may not necessarily be the most favorable for homebuyers and developers as it cuts off the advantage that comes with decline in interest rates. On the other hand, with the onset of the festive season which is characterized by a matter of fact annual surge in property sales, the sector is likely have to offer additional cuts in pricing in order to stimulate sales.”