Festive Boom in Real Estate: Stable Policies and GST Relief Drive Market Growth
As the festive season approaches, India’s real estate sector is witnessing a surge in demand, driven by stable interest rates and recent GST cuts. From tier-II cities to holiday destinations, the market is expected to see robust sales and project activity.
Real EstateFestive SeasonRbiGst CutsHoliday HomesReal Estate NewsOct 03, 2025
From Jaipur’s tier-II residential hubs to Goa’s holiday homes, developers are optimistic that stable borrowing costs and improved affordability will translate into heightened sales and project activity during the festive quarter. The Reserve Bank of India’s (RBI) decision to maintain the repo rate at 5.5% in its October 2025 policy review has been welcomed by real estate leaders.
Developers believe the policy stability, combined with recent GST cuts on construction inputs, will enhance homebuyer confidence and create a favorable environment for housing demand across both metros and emerging markets. The festive quarter has traditionally been a catalyst for home buying in India. With steady borrowing costs and predictable EMIs, buyers are expected to take advantage of the positive sentiment.
Mohit Goel, Managing Director of Omaxe Ltd, said the central bank’s stance comes at the right time. “The RBI’s decision to maintain policy stability at the onset of the festive season is a timely and growth-supportive move. This period has always been a catalyst for homebuying decisions, and steady interest rates will further strengthen consumer confidence and purchasing power,” he explained. Goel also highlighted the role of recent GST rationalisation. “Together, these policy measures create a conducive environment for housing demand, particularly in tier-II and tier-III cities where value sensitivity drives decisions. We expect the festive quarter to witness strong traction across residential segments as buyers look to capitalize on favorable market conditions and long-term growth prospects,” he added.
Beyond metro markets, smaller cities are expected to benefit significantly from the supportive policy backdrop. Developers believe affordability, coupled with aspirational demand, will drive sales momentum. Amrita Gupta, Director of Manglam Group, said the RBI’s decision provides a much-needed sense of continuity. “The RBI’s decision to hold the repo rate steady at 5.5% provides a strong signal of stability, reinforcing confidence in India’s real estate sector. As the economy continues to show resilience and positive momentum, this festive season brings with it renewed optimism for homebuyers,” she said.
She noted that emerging cities are particularly well-positioned. “Coupled with recent GST benefits, this stable policy backdrop is inspiring demand across tier 2 and 3 markets, particularly in Jaipur, where buyers are seeking affordability, aspirational living, and long-term value creation. At Manglam, we believe this confluence of festive sentiment, supportive policy measures, and the rising growth of emerging cities will accelerate sustainable urbanisation and further strengthen India’s real estate growth story,” Gupta added.
Alongside primary housing, the holiday home and second-home markets are also benefiting from the RBI’s steady stance. Rising interest from NRIs and affluent domestic buyers is fueling investments in lifestyle-driven properties. Aditya Kushwaha, CEO and Director of Axis Ecorp, said the stable rate regime is reassuring for investors eyeing holiday homes. “This year has seen strong momentum in the real estate market, with buyers increasingly confident about investing, and the current economic environment continues to support informed investment decisions. The RBI’s decision to hold rates reflects a cautious but steady approach, which is reassuring for buyers in the middle of the festive season,” he said.
Kushwaha pointed out that the holiday home market, especially in destinations like Goa, is seeing robust demand. “Stability in monetary policy keeps sentiment positive for holiday homes, where both NRIs and domestic buyers are showing strong interest. Along with the recent GST concessions on construction inputs, it creates an environment where second homes remain attractive as both lifestyle and long-term investment assets. We see this as a window where second homes, especially in markets like Goa, will attract more decisive investments,” he noted.
With stable interest rates, GST relief, festive season demand, and growing appetite for both first and second homes, the real estate sector is expected to witness sustained momentum in the months ahead. Developers anticipate that both emerging cities and luxury markets will see robust traction, setting the stage for a strong close to 2025 and a positive outlook for 2026.
Frequently Asked Questions
What factors are driving the real estate market during the festive season?
The real estate market is being driven by stable interest rates, recent GST cuts on construction inputs, and the traditional festive season demand. These factors are enhancing homebuyer confidence and creating a favorable environment for housing demand across both metros and emerging markets.
How are tier-II and tier-III cities benefiting from the current real estate trends?
Tier-II and tier-III cities are benefiting from the supportive policy backdrop, which includes stable borrowing costs and improved affordability. These factors, combined with aspirational demand, are driving sales momentum in these smaller cities.
What impact do GST cuts have on the real estate sector?
Recent GST cuts on construction inputs have reduced the cost of building, making housing more affordable. This has enhanced homebuyer confidence and is expected to drive demand, particularly in tier-II and tier-III cities.
Why are holiday homes and second homes gaining popularity?
Holiday homes and second homes are gaining popularity due to rising interest from NRIs and affluent domestic buyers. The stable rate regime and recent GST concessions are creating a favorable environment for these lifestyle-driven properties, especially in destinations like Goa.
What is the outlook for the real estate sector in 2026?
The real estate sector is expected to witness sustained momentum in the months ahead, driven by stable interest rates, GST relief, and growing demand for both first and second homes. Developers anticipate robust traction in both emerging cities and luxury markets, setting the stage for a positive outlook for 2026.
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