By Anuj Puri, Chairman – ANAROCK Group
RBI’s decision to keep the repo rate at 5.25% means that home loan EMIs will not change either. This will keep buyers engaged but does nothing to lift demand further and does nothing to make housing more affordable. The upside is that current house loan borrowers will not experience any EMI shocks for now, and new borrowers can plan their housing purchases with the benefit of predictability.
Demand for affordable and mid-segment homes remains strong, but continues to be challenged by escalated pricing, which affects affordability. A rate cut would have potentially brought at least some fence-sitters back to the market.
Overall trends show that affordable housing remained considerably subdued in 2025, in terms of both sales and new launches. As per ANAROCK Research, the overall sales share of affordable housing was just around 18% of the total housing sales across cities in 2025. Back in 2024, out of the total sales of approx. 4.60 lakh units in top 7 cities, affordable housing share stood at 20%. This share stood the highest in 2019 when out of approx. 2.61 lakh units sold altogether, 38% was within this segment.
Union Budget 2026-27 failed to deliver any notable relief to the affordable housing buyer segment, which is in dire need of proactive intervention by way of interest stimulants for both buyers and developers. The segment needs focused, high-impact measures like tax breaks – for developers, so that they shift their focus more on affordable housing from the current premium and luxury segments, and for buyers, to improve affordability.
On a positive note, the move to allow banks to lend money directly to REITs within the rules makes it easier for REITs to raise capital, lowers expenses, and speeds up asset expansion in the office and retail segments. This makes these segments more appealing to investors and is positive for the broader real estate financing spectrum. It needs to be accompanied by strong regulatory safeguards on exposure limits, and robust credit underwriting and monitoring practices.