RBI Policy Review: Real Estate Sector Eyes Stability and Potential Rate Cuts
With the Reserve Bank of India's (RBI) next Monetary Policy announcement on the horizon, the real estate industry is extremely keen on the central bank's stance on interest rates. Most market participants anticipate that the RBI will adopt a cautious approach by managing inflation and supporting the economy simultaneously.
The real estate sector has seen a surge in sales activities in 2025, bolstered by good liquidity and positive buyer sentiment, particularly in the mid-income and affordable housing segments. Under these favorable conditions, policy continuity is regarded as the main factor to sustain the momentum.
Developers, lenders, and homebuyers are of the same opinion, expecting stability and a few indications of a gentle easing in the near future. A fixed or lower interest rate environment would facilitate EMIs, make project financing cheaper, and attract new investments.
Several high-frequency indicators point to strong economic activity and controlled inflation, boosting the real estate community's optimism that the next policy will consolidate confidence and continue the sector's growth trajectory.
Real Estate Industry Expectations
The real estate sector is anxiously awaiting the review of the monetary policy by the Reserve Bank of India. They expect a status quo to be maintained, which will benefit both buyers and developers. Stability in the cost of borrowing has been instrumental in maintaining demand, especially in the mid-income and economically weaker segments. Industry players believe that the announcement of rates will give the market the trust it needs to continue with the execution of projects and the launch of new ones.
Mr. Shiv Garg, Director at Forteasia Realty, observed that the RBI’s decision to maintain the repo rate signals strong stability in the sector. “The Reserve Bank of India’s decision to maintain the repo rate at 5.50% is signaling a very strong stability to the real estate market. The consistency in monetary policy truly supports housing loans at low rates, thus encouraging the entry of first-time buyers and middle-income families into property ownership. Developers are also aided by financing that is less strict, thus speeding up the sector’s growth through project completions and new launches. The rate stability is perceived positively, and the growth could be sustained through 2025,” he said.
Similarly, Anurag Goel, Director of Goel Ganga Developments, highlighted how rate continuity has eased uncertainties in project timelines. “The maintenance of the repo rate has granted real estate developers the opportunity to operate project timelines with lesser uncertainties. The narrowing of the cost on loans granted by the banks means that it is easier to obtain mortgages, thereby gradually raising the confidence of buyers, especially in the mid-income and affordable segments. This condition is conducive to investments and the sales of inventories, which are essential for the sector’s revival in Tier 1 and Tier 2 cities,” he noted.
Developers also see a positive impact from improved liquidity. Pramod Kumar Gupta of Kadamashree Developers India LLP explained, “The RBI’s choice of not raising the repo rate in a market that is highly dependent on interest rates is reassuring for both buyers and developers. Real estate transactions are mostly supported by an increase in liquidity and reduction in loan costs, especially in the mid-income and affordable housing sectors that are likely to recover soon, thus indicating that the market is getting better.”
Siddharth Maurya, Founder and Managing Director of Vibhavangal Anukulakara, emphasized that lower financing costs are supporting housing demand. “Developers welcome the RBI’s steady repo stance as it lowers project financing costs and facilitates smoother fund flow. Cheaper home loans and sustained growth indicators together will likely spur housing demand, aiding recovery in unsold inventory and boosting new construction momentum,” he said.
Looking ahead, Raoul Kapoor, Co-CEO of Andromeda Sales and Distribution, anticipates a potential rate cut in the next policy review, noting that the current environment is conducive to easing. “We expect the Monetary Policy Committee to announce a 25 basis points rate cut in the upcoming policy review. With inflation steadily moving within the RBI’s comfort range and multiple high-frequency indicators pointing towards a gradual economic softening, the environment is now conducive for a calibrated easing. A rate cut at this juncture would provide meaningful relief to borrowers—particularly those servicing big-ticket loans such as home loans and auto loans. It would help lower the overall cost of credit and, in turn, stimulate demand across key consumption-driven and investment-led sectors of the economy. Also, a measured rate cut will signal confidence in the economic outlook while supporting growth momentum. As a leading loan distribution company, Andromeda believes that easing rates will strengthen credit flows, encourage capital formation, and contribute to a more robust and broad-based economic recovery,” he said.
In general, the real estate market aims to benefit from continuously low borrowing costs coupled with the improving liquidity situation. The market will thus remain solid and attract investors. This circumstance will support project execution, encourage new launches, and increase buyer interest, especially in mid-income and affordable segments.
Way Forward
A steady repo rate by the RBI and the possibility of a calibrated easing are seen by the real estate sector as the main factors leading to a revival of market confidence. Reduced loan rates, better cash flow in the market, and growing consumer confidence—especially in the middle-income and affordable segments—will gradually ease the execution of stalled projects and lead to a rise in new launches. The sector will be able to maintain its sales cycles at full strength and enjoy a strong recovery up to 2025 as a result of these factors coming together.
