Real Estate Bodies Urge RBI to Cut Repo Rate to Boost Housing Demand
CREDAI and NAREDCO call for a repo rate cut to enhance housing demand, especially in the affordable segment. They hope banks will pass on the benefits of previous rate cuts to home loan borrowers.
Repo RateHousing DemandCredaiNaredcoReal EstateReal Estate NewsOct 01, 2025
On Wednesday, the RBI kept key interest rates unchanged, maintaining the repo rate at 5.5 per cent. This decision was made while waiting for greater clarity on the impact of US tariffs and the effects of earlier rate cuts and recent tax reductions. Since February, the repo rate has been cut by 100 basis points to 5.5 per cent.
Commenting on the RBI policy, CREDAI National President Shekhar Patel stated, 'The RBI's decision to hold the repo rate at 5.5 per cent provides the housing sector with the stability it needs amid global uncertainty. Predictable borrowing costs allow buyers to plan long-term and give developers the clarity to progress with financing and projects.' He noted that the recent GST rates rationalisation has lifted consumer sentiment and increased demand across sectors.
While markets had anticipated a 25-basis point cut, Patel expressed hope that the RBI would deliver a cumulative 50-basis point easing this fiscal in two tranches. This would further support market activity. It is essential that banks pass these benefits to both new and existing borrowers so that policy continuity and tax reform translate into sustained demand through the festive season, the CREDAI President emphasized.
During the first nine months of the 2025 calendar year, housing sales have been lower across the top seven cities compared to the year-ago period. This decline is attributed to the higher base effect and a sharp rise in the prices of residential properties in the primary housing markets of these cities.
G Hari Babu, National President of NAREDCO, welcomed the decision to keep the repo rate at 5.5 per cent alongside the projected real GDP growth of 6.8 per cent. However, he urged the RBI to consider bringing the repo rate below 5.5 per cent in the next MPC meeting. 'Lower interest rates will strengthen homebuyers' confidence, increase housing demand, and particularly benefit the affordable housing segment. Supporting industries linked to real estate, such as cement, steel, electricals, piping, and interiors, will also see growth,' said Hari Babu.
CREDAI and NAREDCO are the two major industry bodies of real estate developers with a combined membership of more than 15,000. Their calls for a repo rate cut reflect the industry's need for support to revive the housing market, especially in the affordable segment, where demand has been sluggish.
Frequently Asked Questions
What is the current repo rate set by the RBI?
The current repo rate set by the RBI is 5.5 per cent.
Why are CREDAI and NAREDCO urging the RBI to cut the repo rate?
CREDAI and NAREDCO are urging the RBI to cut the repo rate to boost demand for residential properties, especially in the affordable housing segment. Lower interest rates can increase buyer confidence and stimulate the housing market.
What impact has the recent GST rationalisation had on the housing sector?
The recent GST rationalisation has lifted consumer sentiment and increased demand across sectors, including the housing market.
How have housing sales performed in the top seven cities in the first nine months of 2025?
Housing sales have been lower in the top seven cities compared to the year-ago period, due to the higher base effect and a sharp rise in the prices of residential properties.
What are the combined memberships of CREDAI and NAREDCO?
CREDAI and NAREDCO have a combined membership of more than 15,000 real estate developers.
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