RBI Maintains Repo Rate at 5.5%: Implications for the Real Estate Sector

The Reserve Bank of India (RBI) has maintained the repo rate at 5.5%. What does this decision mean for the real estate sector, especially during the festive season? Insights and perspectives from industry experts.

RbiRepo RateReal EstateHousing MarketGdp GrowthReal EstateOct 01, 2025

RBI Maintains Repo Rate at 5.5%: Implications for the Real Estate Sector

Real Estate:The Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) has announced that the repo rate will remain unchanged at 5.5%. “All six members of the MPC voted unanimously in favour of maintaining the repo rate at 5.5% under the Liquidity Adjustment Facility,” stated Sanjay Malhotra, RBI Governor. The announcement came after the MPC October policy meeting, which took place from September 29 to October 1, 2025.

Affordability remains a significant concern for Indians. To address this, the Indian government has introduced GST reforms with new rates of 5% and 18%. While past rate cuts and the recent GST reforms are expected to boost demand, geopolitical conflicts and punitive trade tariffs imposed by the US on India could have a negative impact. According to Malhotra, despite the uncertainty surrounding tariff situations, the neutral policy stance will continue.

As per the October policy, the Bank Rate and the Marginal Standing Facility (MSF) remain unchanged at 5.75%, while the Standing Deposit Facility (SDF) stands at 5.25%. The GDP growth projection for FY26 is expected to be around 6.8%.

What Does the Unchanged Repo Rate Mean for the Real Estate Segment?

Some industry experts believe that the unchanged repo rate will provide continued relief to the real estate sector. However, others are disappointed with the lack of a further rate cut, which they feel would have helped the sector grow, especially during the festive season.

Praveen Sharma, CEO, REA India (Housing.com)
“The RBI’s decision to hold the repo rate steady at 5.5% ensures continuity in the current borrowing environment. This stability is a positive for homebuyers, particularly during the festive season when purchase intent is at its peak. The cumulative rate cuts of 100 bps this year have already boosted affordability and reinforced buyer sentiment. With the GDP growth forecast now revised upward to 6.8%, and combined with updated banking guidelines, strong demand, festive promotions, and real estate’s appeal as a long-term asset, the housing market is poised for healthy growth in the months ahead.”

Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE
“The RBI MPC’s decision to hold the repo rate at 5.5% reflects a measured approach ahead of the festive season and amidst volatile global macroeconomic and policy conditions. Along with recent GST cuts and range-bound inflation, the announcement is likely to lift consumer sentiment and encourage greater demand across key sectors in the coming weeks. In real estate, it signals a steady growth outlook and reinforces market confidence, offering long-term predictability to developers and homebuyers.”

Vimal Nadar, National Director and Head of Research, Colliers India
“With the RBI maintaining the repo rate at 5.5% for the second consecutive time, monetary policy continues to support stability amidst external trade frictions and fast-changing global economic narrative. This pause, along with the Central Bank’s ‘neutral’ stance, reflects cautious optimism which factors in the resilient domestic economy and moderating inflation levels. The Central Bank has consequently revised the GDP growth projection upwards by 30 basis points to 6.8% for FY 2025-26. Banks are yet to fully transmit the earlier 100 basis points repo rate reduction and are expected to complete this soon in the ongoing festive season, benefiting the real estate sector, especially homebuyers in the affordable and mid-income segments.”

Prashant Sharma, President, Naredco Maharashtra
“The RBI’s decision to keep the repo rate unchanged at 5.5% with a ‘neutral’ stance is a welcome step for the real estate sector, especially during the festive season when home buying sentiment is at its peak. The rationalization of GST will provide a much-needed push to consumer confidence, offsetting inflationary concerns arising from global trade headwinds such as the additional US tariffs. With GDP growth projections revised upward to 6.8%, the overall economic outlook remains positive, translating into healthier housing demand across segments.”

Pradeep Aggarwal, Founder & Chairman, Signature Global (India)
“We welcome the RBI’s decision to maintain the repo rate at 5.50%, as it brings stability and continuity to India’s financial ecosystem amid global uncertainties. The move is expected to sustain positive momentum across sectors, including real estate, by supporting liquidity, boosting consumer confidence, and encouraging investment activity. With the festive quarter beginning on a strong note and GST reforms further lifting sentiment, the housing sector is likely to continue witnessing steady demand across segments. Traditionally marked by heightened consumer activity, this period creates a favourable environment for property purchases and further strengthens market optimism.”

Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation
“The RBI’s decision to maintain the repo rate at 5.50% reflects a cautious and prudent approach to balancing the twin objectives of economic growth and inflation management. With the positive sentiment of the ongoing festive season and recent GST reforms, the market is expected to see a steady uptick in demand for homes across segments. For developers, the decision to keep rates unchanged provides much-needed stability, enabling careful planning and timely execution while building confidence in the sector’s long-term prospects.”

Wish List for Future MPC Decisions

Shishir Baijal, Chairman & Managing Director, India
“While the RBI’s decision to maintain status quo on the repo rate was widely anticipated given the prevailing global and domestic headwinds, the real estate sector had hoped for a further cut to support housing demand, particularly in the affordable segment. Continued fiscal and monetary support would be essential to sustain the momentum built over the past few years. We hope that future MPC decisions will consider accommodative measures to keep home loans affordable and boost consumer confidence in the housing market.”

Ramani Sastri, Chairman & MD, Sterling Developers
“The real estate sector plays a pivotal role in the economy, contributing significantly to employment and GDP. As the sector continues to benefit from improved buyer sentiment and strong housing demand, we were looking forward to a supportive stance from the RBI in the monetary policy during the ongoing festive season. A rate cut at this juncture would have been highly encouraging for homebuyers and developers alike, potentially boosting affordability and further investments in the sector. However, the decision to maintain status quo will keep the ongoing residential real estate sales momentum on course, offering homebuyers assurance of steady loan terms. We are hopeful that the real estate sector’s growth momentum will continue to accelerate further and drive long-term momentum for home ownership and contributing positively to overall economic expansion. As we move ahead, we would definitely welcome further rate cuts in the near term to build confidence in the market.”

Umesh Gowda H.A, Sanjeevini Group Chairman and Founder
“While we welcome the RBI’s decision to maintain status quo in view of the ongoing trade tensions; however, a cut in repo rate along with GST cut would have together made a huge impact on giving a spurt to demand. With slowing housing sales, it is imperative that a boost to the housing sector would go a long way in accelerating demand across all sectors.”

Housing.com POV

The RBI Policy is reassuring that the country’s growth and inflation are strong and stable. This is the second consecutive pause after a cumulative 100 basis point rate cut earlier in the year. It appears to be a deliberate move by the MPC to gauge the impact of the actions taken in the past together with the several other reforms announced by PM Modi on Independence Day. Based on the findings, the way forward will be charted in line with India’s aim of Viksit Bharat 2047.

Frequently Asked Questions

What is the repo rate?

The repo rate is the interest rate at which the Reserve Bank of India (RBI) lends short-term funds to banks and financial institutions. A lower repo rate fosters economic growth, while a higher repo rate can slow it down.

Why did the RBI maintain the repo rate at 5.5%?

The RBI maintained the repo rate at 5.5% to ensure stability in the current borrowing environment, especially during the festive season when home buying sentiment is at its peak. This decision also reflects a cautious approach to balancing economic growth and inflation management.

How does the unchanged repo rate affect the real estate sector?

The unchanged repo rate provides continued relief to the real estate sector, maintaining stability in borrowing costs. This is particularly beneficial during the festive season when home buying intent is high, and it supports ongoing demand and consumer confidence.

What are the GDP growth projections for FY26?

The GDP growth projection for FY26 is expected to be around 6.8%, reflecting a positive outlook for the Indian economy. This upward revision is expected to boost consumer confidence and demand across various sectors, including real estate.

What is Housing.com's perspective on the RBI policy decision?

Housing.com views the RBI policy decision as reassuring, indicating strong and stable growth and inflation. The decision to maintain the repo rate is seen as a deliberate move to gauge the impact of past actions and recent reforms, aligning with India’s aim of Viksit Bharat 2047.