RBI MPC Keeps Repo Rate Unchanged: Mixed Reactions from Real Estate Sector
The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) has kept the repo rate unchanged at 5.5%. The real estate sector has given mixed reactions, with some stakeholders welcoming the decision and others hoping for a rate cut to boost the affordable housing segment.
Repo RateReal EstateRbi MpcAffordable HousingHome LoansReal EstateAug 06, 2025
This comes after the MPC had reduced the repo rate by 50 basis points to 5.5 per cent in the previous policy meeting held in June.
Hoped for rate cut
Lamenting a significant reduction in housing sales from the last year, Anuj Puri, Chairman of ANAROCK Group remarks, “A rate cut leading to a lower interest rate environment would have particularly boosted the affordable housing segment, which has been under considerable pressure in recent years.” Puri shared that in the Q2 2025 alone, just 96,285 homes were sold, showing a steep fall from 120,335 a year ago, indicating increasing buyer hesitancy and market uncertainty. “The affordable housing segment’s fate may be further dampened by the ongoing global trade tensions and tariffs imposed by the Trump administration. This is largely because of its impact on the MSMEs – the key target audience of the affordable segment,” Puri further adds.
Sudhir Pai, CEO of online platform for property and real estate – Magicbricks, also expected a cut in the repo rate, says, “While consumers were hoping for a rate cut to ease home loan EMIs, the unchanged stance ensures affordability doesn’t worsen — thereby keeping demand for residential real estate intact.” “For now, policy continuity bodes well for both home buyers and developers by providing a predictable environment for decision‐making and long‐term planning,” Pai adds further.
Conducive note
Reacting with a welcoming note, Venkatesh Gopalakrishnan, Director Group Promoter’s Office and MD of Shapoorji Pallonji Real Estate, “From a housing perspective, especially in the affordable and mid-income segments, the current rate environment continues to offer conducive conditions for homebuyers. Steady interest rates help preserve affordability and sustain buyer sentiment, encouraging long-term investment in homeownership.”
“We welcome the RBI’s move to keep the repo rates unchanged. The previous rate cut has led to a positive impact in the real estate market and this announcement will help in keeping the momentum going for the sector,” Harsh Jagwani, Managing Director at Notandas Realty remarks.
Anticipating the sector’s growth, Manan Shah, Managing Director of Man Infraconstruction Limited adds, “Given the soft outlook on inflation and the RBI’s support for growth, the unchanged repo rate provides visibility on financing, enabling us to invest confidently in new developments. We anticipate that this will keep the real estate sector’s growth trajectory intact, supporting housing demand through the rest of FY26.”
Frequently Asked Questions
What is the current repo rate set by the RBI MPC?
The current repo rate set by the RBI MPC is 5.5 per cent.
Why did some real estate stakeholders hope for a rate cut?
Some real estate stakeholders hoped for a rate cut to boost the affordable housing segment, which has been under pressure due to declining sales and market uncertainty.
How does the unchanged repo rate affect home buyers?
The unchanged repo rate helps preserve affordability and sustain buyer sentiment, encouraging long-term investment in homeownership.
What is the impact of the unchanged repo rate on the real estate market?
The unchanged repo rate provides a predictable environment for decision-making and long-term planning, which is beneficial for both home buyers and developers.
What is the outlook for the real estate sector in the coming fiscal year?
The outlook for the real estate sector in the coming fiscal year is positive, with stable interest rates expected to support housing demand and growth.
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