In its August monetary policy review, the Reserve Bank of India (RBI) chose to maintain the repo rate at 5.5%, delivering a much-needed stability signal to homebuyers and developers. With inflation cooling to a six-year low of around 2.1% in June and the global economy facing fresh uncertainty due to the US’s 25% tariff on Indian exports, the central bank has opted for a cautious “wait-and-watch” stance rather than rushing into another rate cut.
For homebuyers, this decision directly translates into predictable EMIs and continued affordability of home loans—a crucial factor as the festive season approaches. While developers were hoping for a rate cut to spur even more demand, the current stability provides a conducive environment for long-term planning and financial confidence.
Why This Matters for You as a Homebuyer
Industry experts believe the RBI’s decision will help preserve affordability and sustain housing demand, particularly in mid- and premium-segment homes, which have seen steady interest despite recent global headwinds.
Prashant Sharma, President of NAREDCO Maharashtra, called the move a “cautious yet balanced approach” that keeps homebuyer sentiment strong. He added that while the sector welcomes stability, a calibrated rate cut in the future could further support growth—especially in affordable housing.
Rajiv Agrawal, Promoter & Co-Founder of Saarathi Group, highlighted that unchanged borrowing costs will aid Mumbai’s wave of redevelopment projects, making long-gestation cluster and society redevelopments more financially feasible. This means buyers can expect timely project deliveries and fresh housing supply in urban areas.
Similarly, Virendra Vora, Promoter & MD of Excel Infra Construction LLP, said stable rates are a “positive signal for Mumbai’s next wave of urban regeneration,” making it easier for developers to launch premium redeveloped homes in high-potential zones like Bandra Reclamation.
Bank Loan Rates & Market Momentum
Shishir Baijal, CMD of Knight Frank India, noted that with some banks already reducing home loan rates, policy stability will encourage affordability—especially in mid- and low-income segments. He said, “More transmission of past cuts is underway, which will further support housing demand.”
Dr. Samantak Das, Chief Economist, JLL, explained that after 100 basis points of rate cuts this year, holding rates now gives the system time to fully pass on benefits to buyers. He stressed that stability helps avoid over-reliance on rate cuts and instead builds a market driven by genuine demand.
However, the affordable housing market is facing challenges. Anuj Puri, Chairman of ANAROCK Group, pointed out that sales in the top metros fell by 20% year-on-year in Q2 2025, and average residential prices have surged 39% in two years. The ongoing US tariffs could impact MSMEs—the key customer base for affordable homes. Still, he expects developers to roll out festive offers and flexible payment plans to improve affordability.
Confidence, Festive Season, and Long-Term Growth
Multiple developers and analysts agree that stability will reinforce buyer confidence ahead of the festive season.
- Manju Yagnik, Vice Chairperson of Nahar Group, believes steady rates will support sustained demand in high-growth markets by keeping EMIs manageable.
- Dharmendra Raichura of Ashar Group said unchanged rates, combined with infrastructure development in regions like MMR and Thane, will keep housing demand strong.
- Sunny Bijlani of Supreme Universal added that policy stability will attract both domestic and NRI buyers, especially as urbanisation and lifestyle aspirations rise.
From the luxury segment perspective, Amit Goyal, MD of India Sotheby’s International Realty, said that with GDP growth forecast at 6.5% and inflation trending softer, housing momentum will stay “cautiously positive.”
What Experts Want Next
While most agree that holding rates now is prudent, there’s anticipation for a possible rate cut in the October policy review.
- Piyush Bothra of Square Yards said the onus is now on banks to ensure full transmission of past cuts to homebuyers.
- Vimal Nadar of Colliers India highlighted that with inflation under control, upcoming quarters could see further reductions passed on, boosting buyer activity during the festive season.
- Amit Prakash Singh of Urban Money stressed that a cut in October could act as a “timely catalyst” to boost festive demand.
- Shrinivas Rao of Vestian added that the RBI’s neutral stance will encourage fence-sitters to make investment decisions.
Bottom Line for Homebuyers
The RBI’s decision may not have brought a fresh cut in rates, but it keeps the ground steady for you to plan your purchase without fear of sudden EMI shocks. With the festive season around the corner, stable policy, possible future cuts, and developer incentives could make the next few months a strategic window for homebuyers.
Also Read: RBI Cuts Repo Rate by 25bps: Lower Home Loan Interest for Homebuyers
