RBI Maintains Repo Rate: A Boon for the Real Estate Sector
The Reserve Bank of India (RBI) announced on Wednesday that it would keep the policy repo rate unchanged at 5.25% in its first monetary policy decision for FY 2026-27. RBI Governor Sanjay Malhotra cited growing global uncertainties and ongoing geopolitical tensions as the primary reasons for this decision. The Monetary Policy Committee (MPC) unanimously agreed to hold the repo rate at 5.25% under the liquidity adjustment framework.
For the fiscal year 2026-27, the RBI projects real GDP growth at 6.9%. The quarterly projections are 6.8% for Q1, 6.7% for Q2, 7.0% for Q3, and 7.2% for Q4. Industry experts believe that maintaining the status quo in interest rates will provide a stable environment for the real estate sector, even as external risks persist.
Anuj Puri, Chairman of ANAROCK Group, commented, “As expected, the RBI kept the repo rate at 5.25% in a balanced and cautious approach to the ongoing geopolitical situation in West Asia. While there are still a lot of unknowns, the recent announcement of a ceasefire gives fresh hope for more stability in the future, even though the market is still very volatile in the short term. Keeping rates steady means stability for current and future home loan borrowers. EMIs will remain unchanged, which makes planning for the future easier. This is especially good news for people buying homes, who can now move forward with more confidence.”
ANAROCK Research found that in the first quarter of 2026, about 1,01,675 units worth INR 1.51 lakh crore were sold in the top seven cities. This represents a 7% drop from the previous quarter, but the continued activity indicates that the market is resilient and the fundamentals remain robust. The housing market is well-poised for renewed momentum as consumer sentiment rises in tandem with improving macro-economic clarity.
Shishir Baijal, International Partner, Chairman & Managing Director of Knight Frank India, stated, “The Reserve Bank of India’s decision to keep the repo rate unchanged at 5.25% reinforces a sense of stability at a time when global economic conditions remain uncertain. In the face of external pressures such as geopolitical tensions, volatile energy prices, and currency movements, maintaining the status quo provides much-needed predictability to the broader economy. For the real estate sector, this continuity in interest rates plays a crucial role in sustaining momentum. Stable borrowing costs help preserve affordability for homebuyers while also enabling developers to plan with greater confidence. In an environment where sentiment can be easily influenced by macroeconomic signals, the absence of rate volatility acts as a reassuring factor for the market. With financing costs remaining steady, prospective buyers are better positioned to evaluate and commit to long-term investments such as homeownership.”
Vimal Nadar, National Director & Head of Research at Colliers India, noted, “RBI has kept the repo rate unchanged at 5.25% in its first MPC meeting of the fiscal year. This, along with the continuation of a neutral stance, reflects a ‘wait-and-watch’ approach amid the ongoing West Asia crisis and its fallout on commodity and fuel prices and supply chain disruptions. Although inflation levels have inched up in recent times, driven by crude price volatilities, it remains relatively contained, with a projection of 4.6% for FY 2026-27. Simultaneously, on the growth front, the GDP is forecasted to grow at 6.9%. While the outlook for overall real estate remains positive at this juncture, the likely impact of supply chain shocks and the resultant rise in construction materials can slow down ongoing and future construction activities. The intensity and duration of the ongoing crisis will have a significant bearing on consumption patterns, including retail, hospitality, and housing demand, especially in the affordable and mid-income segments. At the same time, the fundamentals of the Indian economy remain strong and will provide a cushion for the real estate sector to remain resilient in the medium term.”
Piyush Bothra, Co-Founder and CFO of Square Yards, added, “The current update on repo rates brings much-needed predictability for homebuyers and the real estate sector. With borrowing costs holding steady, demand, particularly in the mid-income and premium segments, is expected to remain resilient in the near term. This stability in interest rates also supports buyer sentiment and allows developers and lenders to plan with greater confidence. However, the RBI’s cautious tone suggests that stakeholders should remain prepared for potential shifts as inflation and global uncertainties continue to evolve. Any movement in rates going forward will be closely linked to external factors, and both homebuyers and industry players should stay mindful of changing macroeconomic conditions while making long-term decisions.”
