CREDAI and NAREDCO Urge RBI to Cut Repo Rate to Boost Housing Demand
CREDAI and NAREDCO have called on the Reserve Bank of India (RBI) to reduce the repo rate in the next monetary policy to stimulate demand for residential properties, particularly affordable housing. They also emphasized the importance of banks passing on the benefits of previous rate cuts to both new and existing home loan borrowers.
Repo RateReal EstateHousing DemandRbiCredaiReal EstateOct 02, 2025
They also hoped that banks would pass on the benefits of previous rate cuts to existing and new home loan borrowers. On Wednesday, the Reserve Bank of India (RBI) kept key interest rates unchanged at 5.5%, after cumulative cuts of 100 basis points since February.
Commenting on the RBI policy, CREDAI National President Shekhar Patel said, 'The RBI’s decision to hold the repo rate at 5.5% gives the housing sector the steadiness it needs amid global uncertainty. Predictable borrowing costs allow buyers to plan long-term and give developers the clarity to progress financing and projects.' He noted that the recent GST rates rationalization has lifted consumer sentiment and increased demand across sectors.
While markets had anticipated a 25-basis point cut today, we remain hopeful the RBI will deliver a cumulative 50-basis point easing this fiscal in two tranches, which would further support activity, Patel said.
It is essential that banks pass these benefits to both new and existing borrowers so policy continuity and tax reform translate into sustained demand through the festive season, the CREDAI President said.
During the first nine months of the 2025 calendar year, housing sales have been lower across the top seven cities compared to the year-ago period, due to the higher base effect and also a sharp rise in prices of residential properties in the primary (first sale) housing markets of these cities.
G Hari Babu, National President of NAREDCO, said, 'The decision to keep the repo rate at 5.5% alongside the projected real GDP growth of 6.8 per cent is welcome. However, just as the government has boosted various sectors by cutting GST, a reduction in the repo rate is needed to energize the real estate sector.' He urged the RBI to consider bringing the repo rate below 5.5% in the next MPC meeting.
Lower interest rates will strengthen homebuyers’ confidence, increase housing demand, and particularly benefit the affordable housing segment. Supporting industries linked to real estate, such as cement, steel, electricals, piping, and interiors, will also see growth, said Hari Babu.
CREDAI and NAREDCO are the two major industry bodies of real estate developers with a combined membership of more than 15,000.
Frequently Asked Questions
Why are CREDAI and NAREDCO urging the RBI to cut the repo rate?
CREDAI and NAREDCO are urging the RBI to cut the repo rate to boost demand for residential properties, especially affordable housing. Lower rates would strengthen homebuyer confidence and benefit industries linked to real estate.
What is the current repo rate set by the RBI?
The current repo rate set by the RBI is 5.5%.
How have housing sales been in the top seven cities in 2025?
Housing sales in the top seven cities have been lower in the first nine months of 2025 compared to the year-ago period, due to the higher base effect and a sharp rise in property prices.
What are the benefits of predictable borrowing costs?
Predictable borrowing costs allow buyers to plan long-term and give developers the clarity to progress financing and projects. This stability is crucial for the housing sector, especially amid global uncertainty.
What is the combined membership of CREDAI and NAREDCO?
CREDAI and NAREDCO are the two major industry bodies of real estate developers with a combined membership of more than 15,000.
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