RBI Maintains Repo Rate: A Boost for the Real Estate Market
The Reserve Bank of India's decision to keep the repo rate unchanged at 5.5% in October 2025 has been widely welcomed by real estate leaders. This move is expected to support demand momentum and provide stability for both homebuyers and developers during the festive season.
RbiRepo RateReal EstateHome LoansHousing DemandReal Estate NewsOct 02, 2025
Industry experts noted that while the unchanged rates may not directly improve affordability, they provide much-needed stability in borrowing costs and confidence in home loan EMIs. Anuj Puri, Chairman of ANAROCK Group, emphasized that the move will help sustain buyer sentiment even if it does not immediately improve affordability.
“The RBI’s decision to keep the repo rate unchanged at 5.5% maintains home loan EMIs at current levels, which helps sustain buyer sentiment but does not improve housing affordability. Existing home loan borrowers won’t see any immediate EMI changes, while new borrowers will find loan interest rates holding steady,” he explained.
Puri backed his view with market data, highlighting that residential sales in Q3 2025 across the top seven Indian cities fell 9% year-on-year to 97,080 units, but the overall sales value jumped 14% to ₹1.52 lakh crore. This indicates that demand is shifting towards premium and mid-segment homes. “The combination of stable interest rates and lower construction costs creates a favourable environment for housing demand, especially during the ongoing festive season,” he added.
Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO Maharashtra, said the RBI’s stance sends the right signal of balancing growth with stability. “The RBI’s decision to hold the repo rate steady at 5.5%, after a cumulative 100 basis point cut earlier this year, signals a thoughtful balance between growth and stability. Predictable EMIs give buyers the confidence to act on long-awaited decisions, especially with the recent GST rationalisation improving affordability,” she said.
Yagnik also highlighted the benefits for developers. “Developers benefit from clarity in financing, enabling timely project planning and execution. Despite global headwinds like US tariffs on Indian exports and rising visa costs, domestic housing demand remains resilient across affordable and premium segments,” she added, projecting a firm growth trajectory for the real estate sector in 2026.
In Delhi-NCR, the RBI’s pause is being seen as a key enabler of sustained momentum. Sudeep Bhatt, Director of Strategy at Whiteland Corporation, noted that stability in rates boosts confidence for both buyers and developers. “The RBI’s decision to maintain the repo rate at 5.5% is a strong positive for the Delhi NCR housing market. Stable interest rates give buyers confidence and allow developers to plan and execute projects without concerns over rising borrowing costs, supporting a robust pipeline for new launches,” he said.
Raghav Malhotra, Founder and Director of PRIME Developments, agreed that the unchanged rates will sustain festive season demand, particularly among first-time buyers. “The RBI’s decision will provide confidence in home loan EMIs, enhancing affordability for first-time buyers and fueling festive season demand. This is likely to drive project launches and completions, aligning with heightened Diwali demand. With stable inflation, GDP, and repo rate, consumer confidence remains positive,” he observed.
Adding a broader industry perspective, Rohit Kishore, CEO of Hero Realty, said the policy move brings reassurance for the entire sector. “Keeping the repo rate unchanged at 5.5% is steady and reassuring for the real estate sector. Stable borrowing costs benefit both homebuyers and developers. Buyers enjoy continued lower EMIs and easier access to loans, while developers can manage costs and complete projects on time,” he said.
Kishore further noted that the luxury housing segment in metros is expected to remain strong. “Stable rates and recent liquidity support from the central bank help developers manage project costs, push new launches, and maintain robust housing supply. The continuation of favourable credit conditions and the steady pace of earlier rate cuts also support affordability, particularly in the mid- and affordable housing segments,” he added.
With festive sentiment, stable borrowing costs, GST rationalisation, and easing input prices, the industry expects housing demand, particularly in premium and mid-segment homes, to remain resilient through the remainder of 2025, setting a strong base for 2026.
Frequently Asked Questions
What is the repo rate and why is it important for the real estate market?
The repo rate is the interest rate at which the Reserve Bank of India (RBI) lends short-term money to banks. It is crucial for the real estate market because it influences the cost of borrowing for banks, which in turn affects home loan interest rates for consumers. A stable repo rate helps maintain predictable EMIs and enhances buyer confidence.
How does a stable repo rate benefit homebuyers?
A stable repo rate ensures that home loan interest rates remain consistent, which helps homebuyers plan their finances better. Predictable EMIs provide financial stability and confidence, making it easier for buyers to make long-term decisions about purchasing homes.
What impact does the RBI's decision have on developers?
The RBI's decision to keep the repo rate unchanged provides clarity in financing for developers. This allows them to plan and execute projects more effectively without the uncertainty of rising borrowing costs. Stable conditions help developers manage project costs and maintain a robust pipeline for new launches.
Why is the festive season important for the real estate market?
The festive season, particularly during Diwali, is a crucial period for the real estate market. Many buyers make significant purchasing decisions during this time, driven by festive sentiment and the availability of various incentives. Stable interest rates further enhance buyer confidence and drive demand during this period.
What are the projections for the real estate sector in 2026?
Industry experts project a firm growth trajectory for the real estate sector in 2026. With stable borrowing costs, GST rationalisation, and easing input prices, the demand for housing, particularly in premium and mid-segment homes, is expected to remain resilient. This sets a strong foundation for continued growth in the sector.
Related News Articles
Retail Revolution: India's Retail Space Expected to Boom by 50%
The top seven cities in India, including Mumbai, Delhi NCR, Bengaluru, Hyderabad, Pune, Kolkata, and Chennai, are projected to witness a surge in retail space, with Delhi NCR leading the charge.
Insolvency Proceedings Initiated Against Jaiprakash Associates by NCLT
The National Company Law Tribunal (NCLT) has initiated insolvency proceedings against Jaiprakash Associates, a leading real estate developer, following a plea by ICICI Bank.
Whiteland Corp Partners with Marriott International for Luxurious Housing Project in Gurgaon
Real estate developer Whiteland Corporation has signed an agreement with Marriott International to bring Westin Residences to Gurgaon, offering a luxurious housing project with hotel-inspired lifestyle
New LTCG Rules Bring Relief to Homeowners, Boost Real Estate Stocks
The Finance Minister's decision to amend the LTCG rules has brought cheer to homeowners and boosted real estate stocks. Here's what it means for you.
Shaping Urban India: The Evolution of Real Estate Since Independence
India's real estate sector has played a pivotal role in shaping urban development since independence. With the urban population growing from 62 million in 1947 to over 485 million today, the sector has undergone significant transformations.
Mumbai Police Arrests Conman Who Duped Real Estate Developer of ₹4 Crore and 3.5Kg Gold
Worli police apprehended Dhirendra Chandrakant Shukla, a wanted real estate agent, for duping Avighna Group of Rs2 crore and 3.5kg gold by promising a vacant plot in Worli for development.