Real Estate Sector Celebrates RBI's Decision to Maintain Repo Rate
Real estate developers have welcomed the Reserve Bank of India's decision to keep the policy repo rate unchanged at 5.50 percent, which they believe will support affordability and boost confidence in the housing market.
Real EstateRepo RateRbiHousing MarketEconomic GrowthReal Estate NewsOct 02, 2025
The Reserve Bank of India’s Monetary Policy Committee (MPC) made the decision to maintain the policy repo rate at 5.50 percent in their meeting held on September 29, 30, and October 1. Consequently, the standing deposit facility (SDF) rate remains at 5.25 percent, while the marginal standing facility (MSF) rate and Bank rate remain at 5.75 percent.
Siraj Saiyed, Director of Arete Group, expressed his satisfaction with the decision. “Despite global challenges such as U.S. tariffs and higher visa costs, domestic demand in both residential and commercial segments has remained resilient. The GST rationalization to 1 percent on affordable housing and 5 percent on other residential units has improved affordability, driving a 16 percent rise in residential sales in the first half of 2025,” he said.
Commercial real estate also saw a 12 percent increase in transactions across Tier-1 cities during the same period. Saiyed added, “As India progresses toward its Vikshit Bharat vision, real estate remains a key engine of long-term economic growth. The RBI’s decision to maintain the repo rate at 5.5 percent supports economic stability and offers homebuyers predictable EMIs. With real GDP at 7.8 percent and GVA at 7.6 percent in Q1 2025, India is well-placed to sustain this growth. Backed by strong fundamentals, GST relief, and festive demand, real estate is positioned to drive employment, investments, and confidence into 2026, cementing its role as a catalyst in India’s growth journey.”
Industry leaders also emphasized the importance of affordability. Vishal Raheja, Founder and MD of InvestoXpert, said, “The RBI’s Monetary Policy Committee’s unanimous decision to keep the repo rate unchanged at 5.5 percent and maintain a neutral stance provides stability for the real estate sector amid ongoing cost pressures. Steady rates help ensure that home loan EMIs remain manageable, supporting affordability, particularly as housing demand in major metros has risen by 10–12 percent over the past year. While this decision does not directly stimulate demand, it prevents additional financial strain on developers and buyers. The sector’s sustained growth will depend on broader demand recovery, policy support, and moderation in construction and input costs.”
The impact of stable rates is also being felt in specialized housing segments. Anantharam Varayur, Co-Founder of Manasum Senior Living Homes, commented, “The RBI’s decision to keep the repo rate unchanged at 5.5 percent reflects a balanced stance supporting growth while keeping inflation risks in check. With the GDP growth forecast revised upward to 6.8 percent, the outlook for the economy appears stronger and more stable. For the senior living housing sector, this stability in interest rates offers comfort by keeping borrowing costs predictable for homebuyers. However, the sector’s long-term trajectory will continue to depend on demand dynamics, affordability, and enabling government policies around elderly care. In such an environment, consistency in monetary policy provides a solid backdrop for the sector to innovate and expand responsibly.”
With the festive season around the corner, the RBI’s decision will not only help maintain affordability but also encourage steady investments and sustainable growth across different segments of the housing market. Developers see this policy stance as a confidence booster that balances inflation management with economic expansion, further strengthening real estate’s role in India’s growth story.
Frequently Asked Questions
What is the current repo rate set by the RBI?
The current repo rate set by the Reserve Bank of India (RBI) is 5.50 percent.
How does the repo rate affect the real estate sector?
A stable repo rate helps maintain affordability by keeping home loan EMIs manageable, which supports demand and investment in the real estate sector.
What is the significance of the RBI's decision during the festive season?
The RBI's decision to maintain the repo rate during the festive season helps boost confidence among buyers and investors, encouraging steady investments and sustainable growth in the housing market.
How has the GST rationalization impacted the real estate sector?
The GST rationalization to 1 percent on affordable housing and 5 percent on other residential units has improved affordability, driving a 16 percent rise in residential sales in the first half of 2025.
What are the long-term implications of the RBI's decision for the real estate sector?
The long-term implications include sustained growth, driven by broader demand recovery, policy support, and moderation in construction and input costs, further solidifying real estate's role in India's economic growth.
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