The Reserve Bank of India’s (RBI) decision to keep the repo rate unchanged at 6.5% has sent a mixed signal to the real estate sector. On one hand, the move aims to curb retail inflation and maintain economic stability, but on the other hand, it may impact homebuyers’ affordability and slow down the momentum in the housing market. As the industry reacts to the news, we explore the implications of the RBI’s decision on the real estate sector and what it means for developers, investors, and homebuyers.
Neeraj K Mishra, Executive Director, Ganga Realty, stated, “While some experts have suggested a possible reduction in the repo rate, which would benefit the real estate and related industries, we appreciate the Reserve Bank of India’s (RBI) cautious approach to monetary policy. The decision to maintain the repo rate at 6.5% aims to address retail inflation. Despite this, the luxury housing market continues to thrive. However, prospective buyers in the affordable housing segment may delay their purchasing decisions, awaiting a potential reduction in repo rates to make homeownership more accessible.”
Saransh Trehan, Managing Director, Trehan Group, said, “The RBI’s decision to maintain the repo rate aligns with its goals of curbing retail inflation and achieving a 7.2% GDP growth rate for FY25. We commend the RBI’s balanced approach and hope it yields positive results. In the real estate sector, demand has surged in recent years, with luxury markets experiencing a significant upswing despite consistent repo rates. While high-end buyers continue to invest in real estate, mid-range and affordable homebuyers may pause their purchasing decisions due to high mortgage rates resulting from the unchanged repo rates.”
Dushyant Singh, Director, Orion One 32, stated, “The housing market is expected to experience broad-based growth across all segments. Although a reduction in repo rates would have been welcome, we understand the RBI’s decision to maintain rates to address retail inflation. By keeping interest rates stable, the central bank aims to promote stability, encourage competitive home loan offerings, and revitalize the housing market. This move is expected to boost the real estate sector, benefiting both developers and homebuyers. While the decision aims to stimulate demand, it also acknowledges the need for cautious progress amid inflationary pressures. This measured approach to borrowing rates prioritizes affordability and sustainability, supporting potential homebuyers and maintaining momentum in the market.”
Shiven Vikram Bhatia, Executive Director, Splendor Group, affirmed, “The RBI’s decision to hold the repo rate steady at 6.5% strikes a balance between managing inflation and supporting growth. While we had hoped for a rate cut to boost affordability, we recognize the central bank’s prudent approach. The stable interest rate environment will continue to drive demand in the housing market, particularly in the mid-to-luxury segments. We expect the market to remain resilient, with homebuyers taking advantage of competitive home loan offerings and stable prices. As a developer, we will focus on delivering quality projects that meet the evolving needs of homebuyers, capitalizing on the sustained demand and positive market sentiment.”
The RBI’s decision to hold the repo rate steady has brought a sense of caution to the real estate market. While the move may not have provided the immediate boost that the sector was hoping for, it has ensured stability and paved the way for sustained growth. As developers and homebuyers adapt to the new reality, the focus will shift to competitive home loan offerings, innovative marketing strategies, and quality project deliveries. With the market expected to remain resilient, the RBI’s decision may ultimately prove to be a blessing in disguise for the real estate sector, balancing growth with prudence and setting the stage for long-term success.