RBI’s ‘Cautious, Balanced Approach’ on Repo Rate Status Quo to Keep Real Estate Growth on Track

Mumbai, August 6, 2025: The real estate sector welcomed the Reserve Bank of India’s (RBI) status quo on the repo rate at 5.5 per cent on Wednesday.

After three straight cuts, the Central bank kept the repo rate— the rate at which it lends money to commercial banks—as the rupee remains under pressure due to the US tariff threat. However, the decision also reflects the RBI’s confidence in the economy, especially softening inflation, despite global uncertainties.

With the festive season approaching, the real estate sector has praised the RBI’s decision. Industry leaders expect the sector’s growth momentum, especially buyers’ interest, to continue.

While a rate cut could have given homebuyers a much-needed boost, developers say the RBI’s decision reflects a cautious and balanced approach.

“This steady approach will help anchor economic sentiment and indirectly benefit the real estate sector. While a rate cut could have further lowered home loan interest rates—encouraging more first-time buyers and end-users to enter the market—the current environment still supports growth,” said Prateek Tiwari, MD, Prateek Group.

“Developers, too, are likely to stay bullish on new launches, especially in emerging corridors. Overall, this move reinforces market stability and contributes to the broader economic momentum.”

Ashwani Kumar, Pyramid Infratech, said that the decision “reflects a balanced and cautious approach in a dynamic economic environment”.

“We believe that a rate cut would have further boosted housing demand and increased stability, signalling confidence in the ongoing economic situation unfolding. For the real estate sector, continuity helps sustain the current momentum in homebuyer sentiment, especially for first-time homebuyers.”

Amit Modi, Director, County Group, welcomed the RBI’s decision and said that the repo rate is “within the comfort zone of the economy and bodes well for the real estate sector”.

“It is also important to note that RBI continues to maintain its neutral stance, which, in conjunction with the rapidly falling inflation, implies that we may expect a further rate cut in the October cycle.”

Vikas Dua, Founder and Director, Chintamanis, said, “The RBI bringing the repo rate to 5.5 per cent in June was already in sync with the expectations of the real estate sector. But the real focus now is on continuity. We have high hopes that the government will sustain this momentum with supportive policies in the upcoming monetary policy announcement.”

While interest rates are just one factor, he added, “a further reduction would boost the confidence of buyers and will further induce their investment and consumption decisions”.

Adish Oswal, Chairman, Oswal Group, said that the decision “reinforces economic stability while continuing to support the housing sector”.

“The cumulative one cent reduction since February has already improved liquidity, enabling developers to fast-track launches and project deliveries. Meanwhile, the firm reduction in home loan rates is gradually boosting affordability, especially for first-time buyers. Together, these factors are expected to fuel fresh momentum in the real estate market and pave the way for sustained growth in the months ahead.”

Pradeep Aggarwal, Founder and Chairman, Signature Global (India) Ltd., said, “The RBI’s unchanged policy stance is set to keep the real estate sector’s growth momentum on track. With steady interest rates and strong consumer confidence, developers are expected to meet the sustained demand for quality housing through a greater focus on new offerings.”

This sustained activity will “further strengthen the real estate sector’s contribution to GDP growth, job creation and the expansion of urban infrastructure in the coming quarters”.

Avneesh Sood, Director, Eros Group, said that the stable policy environment is “crucial” for the sector. “Lending rates are softening, especially in the mid- and premium housing segments, which is already encouraging fresh buyer interest. Developers, too, are finding more headroom for project planning and funding.” 

He added that a neutral stance provides “predictability and cushions sentiment”. “Rural consumption remains resilient, and public capex is driving infrastructure momentum. This combination, if sustained, can lay the groundwork for a stronger and broader-based real estate recovery in the coming quarters.”

Amit Goyal, MD, India Sotheby’s International Realty, said that strong consumption and stable urban demand are already supporting the housing sentiment. “With home loan rates easing with three previous repo rate cuts in 2025, we believe the momentum in home buying will remain cautiously positive—much like the RBI’s approach, balancing domestic resilience with global uncertainties.”

Vimal Nadar, National Director and Head of Research, Colliers India, said that “stability in monetary policy augurs well for homebuyers and real estate developers, particularly in the affordable and mid-income segments”.

The lowering of interest rates in the recent past is expected to be fully passed on to the end-users in upcoming quarters, who are likely to benefit from reduced financing costs, he added.

“With the festive season approaching, developers can further capitalise on this momentum with timely project completions, new launches and festive offers and discounts. Overall, the cautious yet growth-supportive monetary policy is likely to strengthen demand across real estate segments in the second half of 2025.”

Anuj Puri, Chairman, ANAROCK Group, said that the real estate has “weathered unrelenting turbulence as the sentiment is pressured by Donald Trump’s new 25 per cent tariffs and a notable 20 plunge in housing sales across top metros, per the latest ANAROCK data”.

In Q2 2025 alone, just 96,285 homes were sold, a steep fall from 120,335 a year ago, indicating increasing buyer hesitancy and market uncertainty. Amid these headwinds, the Central bank’s policy choices come with high relevance to initiate a turnaround and arrest further market deterioration.

“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,” he added.

ANAROCK data shows that average residential prices across the top seven cities combined have increased by 39  per cent in the last two years alone—from INR 6,470 per sq ft as of Q2 2023 to INR 8,990 per sq ft as of Q2 2025. 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.

“That said, overall, homebuyers are currently driven by long-term confidence rather than short-term rate fluctuations. Given the upcoming festive season, developers may look to keep the market momentum going with offers and flexible payment plans, which may help improve affordability for many genuine buyers.”

Anshuman Magazine, Chairman and CEO, India, Southeast Asia, Middle East and Africa, CBRE, said, “The announcement reflects ongoing demand recovery and a steady growth outlook, which reinforces market confidence for sectors, including real estate, manufacturing, and infrastructure.”

For the real estate sector specifically, “this signals stability and offers long-term predictability to developers and homebuyers. The upcoming festive season and range-bound inflation are expected to boost the market momentum further”, he added.

Manoj Gaur, CMD, Gaurs Group, said, “With inflation significantly below the RBI’s target, the decision will definitely boost the economy and impart positive sentiment to the real estate sector, particularly at the onset of the festive season, a critical period for housing demand.”

He added, “We believe this consistency in policy will help strengthen buyer confidence and stimulate activity across the real estate landscape. It also enables developers to plan ahead with greater clarity, especially for integrated and long-term projects.”

Ashwinder R Singh, Vice-chairman and CEO, BCD Group, said, “With policy rates on pause and inflation poised to ease, the real cost of owning a home is slipping lower—making quality, affordable housing the next frontier. We’ll see a shift from speculative land bets to developments designed around people’s needs and long-term value.”

Deepak Kapoor, Director, Gulshan Group, says, “The RBI’s previous rate cuts significantly bolstered housing demand with Tier 1 cities recording residential sales worth INR 3.6 lakh crore in just the first half of 2025. Even though a slight reduction could have further fuelled this growth, particularly benefiting affordable and mid-segment homebuyers. We look forward to a possible rate cut in the festive season as this would provide a timely push to housing demand, especially for first-time buyers and budget-conscious investors.”

Sandeep Chhillar, Founder and chairman, Landmark Group, said, “The RBI sustaining the status quo marks a strong pro-growth signal and undoubtedly benefits the real estate sector. With home loan rates likely to fall further, affordability will improve, especially for first-time homebuyers.”

This move is expected to reignite demand, sustain buyer interest and create a favourable environment for continued growth across the housing market, he added.

Uddhav Poddar, CMD, Bhumika Group, said, “By maintaining a neutral stance, the RBI has preserved its flexibility to respond to evolving conditions. For businesses like ours operating in the real estate sector, this stability offers a degree of confidence as we plan for the upcoming festive quarter and beyond.”

Pankaj Jain, Founder and CMD, SPJ Group, says, “While a rate cut would have further boosted home loan affordability, the current stability still bodes well for the real estate sector—especially luxury housing, where demand remains robust. With borrowing costs steady, both end-users and investors can plan confidently and developers are likely to continue exploring untapped micro-markets.”

This move reinforces policy consistency and supports ongoing recovery across the sector while contributing to broader macroeconomic resilience, he added.

Gurpal Singh Chawla, MD, TREVOC Group, said, “The RBI decision will bring cheers to the sector. At 5.5  per cent, home loan continues to be affordable, and given the fact that the festive season is merely two months away, it will boost the market’s prospects and lead to the real estate sector’s growth.”

Sanjay Sharma, Director, SKA Group, said, “Setting a positive tone for the real estate sector, the RBI’s decision will continue to ease the homebuying process, enhancing home loan affordability and supporting demand across the segments. We see this announcement as a positive push towards a broader recovery in real estate and the economy at large.”

Rajjath Goel, MD, MRG Group, said that for the real estate sector, especially in the premium segment of Gurugram, this continuity in policy offers reassurance to both developers and discerning homebuyers.

“As we approach the festive season, stable interest rates will help sustain the demand momentum built over the last few quarters and encourage long-term investment sentiment,”

Sahil Agarwal, CEO, Nimbus Group, said, “The repo rate is at the real estate sector’s comfort level. With inflation at 2.1 per cent in June, the RBI had a strong case for a reduction. However, the Trump Tariff and the ensuing geopolitical tensions acted as headwinds. As the domestic factors are within control, let’s hope that the international climate resolves soon, giving the Central bank the leeway for a rate cut during the festival season.”

Umang Jindal, CEO, Homeland Group, said, “For the real estate sector, maintaining the current rate means borrowing costs remain stable, which may support ongoing housing demand but also means developers and homebuyers won’t get any additional financial relief for now.”

It could lead to a wait-and-watch sentiment among buyers, he added, expecting further rate cuts while developers might focus on optimising existing projects rather than aggressively expanding. “The unchanged rate also reflects a balancing act, managing inflation without disrupting growth momentum.”

Mayank Jain, CEO, KREEVA, said, “While a further rate cut could have served as a timely catalyst to boost market sentiment and accelerate economic revival, the Central bank’s steady approach still sends a strong signal of macroeconomic stability. This consistency will help anchor buyer confidence and indirectly benefit the real estate sector.”

Developers are expected to remain active, particularly in emerging growth corridors, as the environment continues to support both demand and supply-side expansion, he added. “Overall, this decision contributes to a stable platform for continued momentum.”

Ishaan Singh, Director, AIPL, said, “The RBI’s decision will strengthen confidence among buyers and developers, especially amid the swift shift in global sentiments and recent tariff impositions.”

The move also highlights the government’s attentiveness to market sentiment, creating the conditions for stronger sales and heightened activity. “We anticipate that this move will reinforce the sector’s upward trajectory and drive sustained development in the years ahead.”

Ashok Singh Jaunapuria, MD and CEO, SS Group, said, “While an additional rate cut could have further accelerated housing demand, the stability in policy still reinforces buyer confidence—especially with retail inflation well within target levels. The impact of previous rate cuts is still playing out, and we expect this consistent stance to encourage fence-sitters to take decisive steps towards home ownership during the festive season.”

Yash Miglani, MD, Migsun Group, says, “By maintaining a neutral policy stance, the RBI has reinforced confidence within the real estate sector while keeping the door open for potential rate cuts ahead. This stability is likely to encourage property investments and support stronger sales momentum.”

As the economy continues to grow, consistent interest rates will benefit both buyers and developers, offering a solid foundation for sustained market expansion, he added.

“Given the real estate sector’s sensitivity to interest rate movements, the RBI’s measured approach is expected to offer meaningful support and unlock new investment opportunities.”

Piyush Kansal, Executive Director, Royale Estate Group, said, “The RBI’s decision to maintain the repo rate aligns with expectations within the residential real estate sector. While an additional cut could have further boosted housing loan demand, the current rate stability continues to support homebuyer confidence and affordability. This consistency is likely to encourage new project launches and sustained traction in residential sales, especially as buyers look for long-term value and financial clarity.”

Kushagr Ansal, Director, Ansal Housing, said, “The stability will benefit the real estate sector, especially at a time when many people are planning to purchase homes during the festive season. With EMIs expected to remain steady, it will encourage homebuyers to consider housing loans more confidently and make timely decisions.”

Ankit Kansal, MD, 360 Realtors, said, “The RBI could have considered lowering the rates by another 25 to 50 basis points in the face of reduction in retail inflation. The retail inflation has touched its lowest point in the past six years while the food inflation also continues to soften.”

The inflationary pressure will further spiral downward backed by rise in economic activities and a healthy monsoon season. “This gives the RBI enough headspace to inject more liquidity in the market. Real estate is one of the key growth engines in the economy and a looming job cuts in the IT sector might further weigh down on the sector. It is hence imperative to take proactive steps to keep the demand driving and help the realty sector grow forward.”

A forward-looking real estate industry is a major cog in the economic progress as it supports millions of jobs and hundreds of ancillary industries,” he added.

Salil Kumar, Director, Marketing and Business management, CRC Group, said, “The RBI’s decision is a welcome and stabilising move for both the residential and commercial real estate segments. There is room for optimism around future rate cuts, which could further strengthen market sentiment.”

For homebuyers, stable interest rates ensure continued affordability and decision-making confidence, he added.

“On the commercial front, this would improve financial clarity, and steady borrowing costs are likely to attract investor interest, particularly in office and mixed-use assets. We hope the RBI continues its balanced approach, supporting long-term sectoral growth across all asset classes.”

Saurabh Saharan, Group MD, HCBS Developments, said, “The RBI’s decision supports buyer confidence and keeps home loan EMIs stable. In Gurugram, demand remains strong, particularly in the mid and premium segments. While the recently proposed circle rate hikes may impact pricing in select pockets, overall market sentiment is upbeat and growth momentum continues.”

Stable rates will further drive residential demand and encourage developers to bring new projects aligned with evolving buyer preferences, he added.

Manit Sethi, Director, Excentia Infra, says, “For the real estate sector, this consistency in policy builds long-term confidence among both buyers and developers. It ensures borrowing costs remain manageable, encourages investment and supports sustained growth beyond just the festive season. Such stability is essential for a sector that thrives on predictability and trust.”

Prakash Mehta, CMD, Ocus Group, said the RBI policy continuity provides a conducive environment for long-term planning, boosts institutional and private equity confidence, and supports the steady execution of infrastructure-driven developments across asset classes.

Sakshee Katiyal, Chairperson, Home and Soul, said, “The accommodative policy stance throughout the year has already softened borrowing costs and improved liquidity. With inflation under control and economic activity picking up pace, this stability gives both homebuyers and developers a clear signal to move forward decisively.”

Rakesh Kaushik, Director, VHD Group, says, “The RBI’s decision reinforces policy stability, which is crucial for sustained market confidence, particularly in Tier 2 and 3 cities. These regions are driven by end-user demand and long-term value perception, and consistent monetary policy provides the right environment for first-time buyers to make informed decisions.”

The previous rate cut had already set the momentum, and this steady approach will ensure that homebuyer interest remains intact through the upcoming festive season.

Kapil Chug, VP, Sales, RISE Infraventures, said, “The RBI’s decision sends a strong signal of monetary stability, which is crucial for the residential real estate market. With homebuyers becoming increasingly sensitive to interest rate movements, this steady stance helps maintain their confidence and encourages timely decision-making. Predictable borrowing costs play a key role in sustaining demand and supporting long-term housing aspirations.”

Sunny Katyal, Co-founder, Investors Clinic, said, “The RBI’s consistent and cautious approach this year has created an environment of monetary stability. For the real estate sector, this signals continuity and confidence, encouraging sustained investment and long-term planning.”

Vishesh Rawat, VP, head of marketing, sales & CRM, M2K Group, said, “For the real estate sector, especially in a time when buyer sentiment is gradually improving, this move ensures that home loan rates remain attractive and predictable. As we approach the festive season, stable borrowing costs are likely to support housing demand across segments, particularly among first-time buyers and the mid-income group.”

It also sends a positive signal to developers and institutional investors looking at long-term commitments, he added.

Vishal Sabharwal, Head, sales, Orris Group, said, “With a cumulative 100 bps rate cut already in place since February, the focus now shifts to ensuring effective transmission. Even with a status quo, the policy signals remain encouraging, keeping EMIs stable and sustaining buyer sentiment. This consistency is crucial as we head into the festive season, when demand typically sees a natural uptick.”