Strategic Location and Connectivity

Located in Ulwe, Navi Mumbai, the NMIA is strategically positioned to alleviate congestion at the existing Chhatrapati Shivaji Maharaj International Airport. The airport’s design incorporates multimodal connectivity, including road, rail, and metro links, ensuring seamless access for passengers and enhancing the region’s accessibility.

Economic and Urban Impact

The establishment of NMIA is expected to stimulate economic growth by attracting investments, boosting tourism, and creating employment opportunities. The surrounding areas, particularly the Panvel-Ulwe corridor, are anticipated to experience significant development across various asset classes, including residential, commercial, and industrial sectors.

Expert Insights

Karan Singh Sodi, Senior Managing Director (Mumbai MMR & Gujarat) and Head-Alternatives, India, JLL, emphasized the transformative potential of the NMIA:

“With the impending launch of the world-class Navi Mumbai International Airport, the city is poised to further elevate its status as a premier global metropolitan destination. This transformative project is a testament to the visionary efforts of both the central and state governments, whose commitment to integrated infrastructure—encompassing rail, road, and metro connectivity—has unlocked unprecedented avenues for growth across all segments. The seamless last-mile connectivity and strategic positioning of the airport are setting new benchmarks for urban development, economic opportunity, and global connectivity, reaffirming Navi Mumbai’s emergence on the world stage. With the launch of this airport, the entire Panvel-Ulwe corridor is expected to grow significantly across multiple asset classes.”

Inauguration Details

The NMIA is scheduled for inauguration on October 8, 2025, with Prime Minister Narendra Modi set to officiate the ceremony. The airport’s phased operational commencement is expected to begin by December 2025, with full-scale operations anticipated in the following year.

Conclusion

The NMIA stands as a testament to India’s commitment to enhancing infrastructure and connectivity. Its development is poised to significantly impact regional growth, positioning Navi Mumbai as a key player in the global urban landscape.

Also Read: CIDCO clears entire Navi Mumbai International Airport site

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Industry body CREDAI-MCHI has welcomed the government’s initiatives, emphasizing their impact on housing and connectivity. Domnic Romell, President of CREDAI-MCHI, said, “The Maharashtra state budget lays a strong foundation for economic growth through strategic investments in infrastructure and housing. The focus on urban development, including multi-modal corridors, metro projects, and improved connectivity, will propel the MMR as the economic powerhouse of India. The allocation of ₹8,100 crore for urban housing reaffirms the government’s commitment to ‘Housing for All,’ which will provide a significant boost to real estate development.”

The budget’s emphasis on industrial growth is also expected to drive demand for commercial and residential real estate. Dhaval Ajmera, Secretary of CREDAI-MCHI, highlighted the importance of the ‘Make in Maharashtra’ policy and projected investments of ₹40 lakh crore over the next five years. “The budget’s emphasis on industrial development, transport infrastructure, and housing will unlock new opportunities for real estate and allied sectors. The government’s focus on streamlining policies, enhancing fiscal discipline, and ensuring timely project execution will bring greater stability and confidence to the sector,” he said.

Experts believe the government’s focus on capital investment and innovative financing models will lead to sustained economic stability. Nikunj Sanghvi, Treasurer of CREDAI-MCHI, noted, “A budget that prioritizes capital investment and fiscal responsibility is always a win for real estate and infrastructure. The commitment to rural and urban housing, road connectivity, and financing through models like Maha InvITs will drive long-term economic stability. With GST revenues witnessing steady growth and Maharashtra maintaining its lead in infrastructure spending, the real estate sector is poised for sustained expansion.”

With increased investments in housing and infrastructure, the Maharashtra budget is expected to strengthen the state’s real estate sector.

Also Read:budget expecations by real estate

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Surge in Institutional Confidence

The sharp correction in Nifty 50 and Sensex since September 2024 has made retail and short-term investors cautious. However, institutional investors have taken a long-term view, particularly in real estate, which continues to attract strategic funding.

“Our analysis highlights the resilience of the real estate sector, supported by robust institutional confidence in India’s economic fundamentals,” said Anuj Puri, Chairman of ANAROCK Group. “Despite volatility, capital markets remain strong, and the sector has witnessed unprecedented QIP fundraising, reinforcing its financial strength and expansion potential.”

Real Estate Leads the QIP Boom

The real estate sector topped the list in both capital raised and the number of QIP issuances in 2024. The following table highlights major QIP transactions in the sector:

Comparing Trends: 2023 vs. 2024

The record-breaking QIP figures in 2024 mark a stark contrast to 2023, when only 43 QIP issues were recorded, raising INR 55,109 crore across all sectors. Notably, real estate developers did not raise any funds through QIPs in 2023, making 2024 a remarkable turnaround year for the sector.

Why QIPs?

QIPs have become the preferred fundraising method for developers due to their efficiency and cost-effectiveness compared to private equity and bank loans. They provide liquidity while minimizing shareholder dilution and enabling large-scale projects. Institutional investors, including mutual funds and pension funds, inject substantial capital, fueling sectoral growth.

The benefits of QIP fundraising include:

• Faster capital raising with lower costs
• Strategic funding for land acquisition, construction, and debt refinancing
• Enhanced market credibility, attracting further investments
• Accelerated project timelines and expansion capabilities

Stock Market Volatility and Real Estate Resilience

Throughout 2024, the Nifty 50 and Sensex experienced significant volatility. While the first half of the year saw strong corporate earnings and increased foreign institutional investment, market corrections in the latter half were driven by global geopolitical tensions, fluctuating oil prices, and changing monetary policies.

Despite these fluctuations, the real estate sector demonstrated resilience, with the Nifty Realty Index securing the fourth-highest annual gain at 34.67%.

Outlook for 2025

“The volatility seen in late 2024 suggests a mixed outlook for QIP fundraising in 2025,” said Puri. “However, the continued strength of the real estate index indicates sustained investor confidence.”

Institutional investors seeking stability amid broader market fluctuations are expected to remain active in real estate QIPs. If global monetary policies stabilize and domestic economic indicators remain strong, QIP fundraising in real estate is likely to maintain momentum, supporting further expansion, land acquisitions, and debt refinancing for major players.

Conclusion

Despite stock market volatility, 2024 set a new benchmark for QIP fundraising, particularly in the real estate sector. Institutional investors continue to back India’s real estate market, recognizing its long-term growth potential. With continued investor confidence and strategic capital inflows, the sector is poised for sustained expansion in 2025 and beyond.

Source: NSE & ANAROCK Research

Also Read: Ajay Devgn real estate

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A Long-Awaited Move

Dr. Niranjan Hiranandani, Chairman of NAREDCO, welcomed the decision, stating, “This long-awaited and strategic move signals resilience in the market. With inflation under control and economic growth on track, lower interest rates will nudge homebuyers towards ownership, enhancing sales velocity.”

Domnic Romell, President of CREDAI-MCHI, emphasized the combined impact of fiscal policies, saying, “The RBI’s decision, along with the Budget’s pro-middle-class measures like higher income tax exemptions and enhanced home loan interest deductions, will encourage homeownership and boost demand, especially in urban centers like the Mumbai Metropolitan Region (MMR).”

Positive Impact on Homebuyers and Developers

Anuj Puri, Chairman of ANAROCK Group, noted that the rate cut aligns well with the recent housing market trends. “With housing prices rising by 13-30% across top cities in the last year, reduced home loan rates will provide a timely breather for buyers. Many first-time homebuyers who were hesitant may now take the plunge.”

Dinesh Yadav, MD of Fine Acers, highlighted the broader economic impact: “This move enhances liquidity, promotes borrowing, and supports consumer demand. It will stimulate residential and commercial activity, benefitting allied industries like construction, cement, and steel.”

Vishal Raheja, Founder & MD of InvestoXpert.com, echoed similar sentiments, stating, “Lower borrowing costs will boost homebuyer sentiment, increasing affordability and driving residential sales. Combined with tax relief, this will revive demand in the housing sector.”

A Boost for the Economy

Amit Bhagat, CEO & MD of ASK Property Fund, stressed the importance of the move for affordable housing. “Declining affordability due to high prices and interest rates had impacted housing sales. This rate cut, along with Budget initiatives like SWAMIH Fund 2, will help sustain demand and drive sales growth.”

Sunil Sisodiya, Founder of Geetanjali Homestate, highlighted the macroeconomic impact: “With inflation stable and GDP growth projected at 6.7%, this policy shift will increase liquidity, making real estate a more attractive investment.”

Cautious Optimism

While the real estate sector welcomes the rate cut, experts caution that its full impact depends on banks passing the benefits to consumers. “The cut will have a significant bearing on homebuyer sentiment, but rising property prices and inflation could limit its effectiveness,” noted Vimal Nadar, Head of Research at Colliers India.

Shrinivas Rao, CEO of Vestian, pointed out potential challenges, saying, “This move aims to boost liquidity, but could also put pressure on the rupee in international markets, affecting foreign investments.”

Piyush Bothra, CFO of Square Yards, summed up the overall sentiment: “Lower borrowing costs, stable inflation, and economic growth create strong tailwinds for real estate. ‘Acchhe din’ for the sector are set to continue.”

Conclusion

The RBI’s first repo rate cut in five years is seen as a major step toward improving housing affordability, boosting demand, and strengthening the real estate sector. As banks begin passing on the benefits, both homebuyers and developers are expected to gain, ensuring sustained momentum in the property market.

Also Read: stamp duty discount for homebuyers

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Lower home loan interest rates will provide much-needed relief to homebuyers by reducing their equated monthly installments (EMIs), making property purchases more affordable. Industry leaders believe this decision will drive housing demand, boost market activity, and encourage more investments in real estate.

A Positive Step for Homebuyers and Developers

Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO Maharashtra, welcomed the decision, stating, “The RBI’s decision to cut the repo rate by 25 basis points to 6.25% is a welcome step for the real estate sector, especially as this is the first reduction since February 2023. Lower home loan interest rates will provide much-needed relief to homebuyers, making property purchases more affordable by reducing EMIs. This move is expected to drive demand for housing, boosting market activity and encouraging more people to invest in real estate. It also enhances confidence among both buyers and developers, leading to a stronger and more dynamic sector. Developers will benefit from easier access to funds, helping them complete projects faster and meet the rising demand. At the same time, this decision aligns with the government’s focus on economic growth, supporting long-term stability in the housing sector. This rate cut is a much-needed push that will help both homebuyers and developers while driving positive momentum in real estate.”

The cut in the repo rate is expected to reduce borrowing costs, which will not only make home loans more affordable for buyers but also ease financial stress for developers.

Sunny Bijlani, Joint Managing Director of Supreme Universal, emphasized the benefits for both homebuyers and developers, saying, *“The RBI’s decision to cut the repo rate by 25 bps from 6.50% to 6.25% in February 2025 is a significant boost for the real estate sector, particularly for homebuyers and developers. Lower borrowing costs translate into reduced home loan EMIs, making property purchases more accessible, especially in the premium and luxury segments. This move will not only ease the financial burden on existing homeowners but also encourage new buyers to enter the market, strengthening overall demand.

For developers, the rate cut means lower financing costs, enabling them to fund projects more efficiently and accelerate delivery timelines. With capital becoming more affordable, we expect renewed momentum in high-end real estate, where buyers seek quality living spaces with long-term value appreciation. The increased liquidity and affordability will help clear unsold inventory, drive sales, and sustain the sector’s upward trajectory in 2025.”*

Encouraging First-Time Buyers

Experts believe that this rate cut will be especially beneficial for first-time homebuyers. Lower interest rates mean reduced financial burdens, making homeownership more attainable, particularly in the mid and premium housing segments.

Dharmendra Raichura, VP & Head of Finance at Ashar Group, highlighted the advantages for new buyers, stating, “The Reserve Bank of India’s (RBI) decision to reduce the repo rate by 25 basis points to 6.25% is expected to have a positive impact on the real estate sector, particularly for first-time homebuyers. With lower home loan interest rates, our homebuyers will find housing more affordable, especially in the mid and premium segments. This reduced financial burden will boost property demand, encouraging more purchases and enhancing market liquidity. Developers will also stand to benefit from improved cash flow and reduced financing costs. This will enable us to stimulate construction activity, leading to more real estate projects and employment. This policy shift, combined with stabilizing inflation and accelerating urbanization, creates a favorable environment for our customers to invest in their dream homes. With growing market confidence, developers are committed to delivering long-term value and success to our customers in 2025.”

The Road Ahead

With the RBI’s rate cut, banks and financial institutions are expected to pass on the benefits to borrowers, leading to a reduction in home loan interest rates. This will likely trigger an uptick in home sales, particularly in metro cities where property prices have been rising. The move also comes at a crucial time when urbanization is accelerating, and the demand for quality housing continues to grow.

While the real estate sector has seen steady demand over the past few years, affordability has been a key concern, especially for first-time homebuyers. With the repo rate cut, housing finance is expected to become more accessible, allowing more people to enter the market and invest in their dream homes.

Overall, this decision is a strong signal from the RBI in support of economic growth, and experts believe it will drive long-term stability in the real estate sector. As homebuyers enjoy lower EMIs and developers gain easier access to funding, the housing market is set to gain fresh momentum in 2025.

Also Read: RBI interest ratees

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Key Budget Highlights Impacting Real Estate

• Zero Income Tax Up to ₹12 Lakh: This move is expected to boost disposable income and increase housing demand, particularly in the affordable and mid-income segments.
• ₹1 Lakh Crore Urban Challenge Fund: Aims to transform cities into economic hubs, supporting infrastructure and real estate growth in Tier 1 & Tier 2 cities.
• ₹15,000 Crore SWAMIH Fund 2.0: Expected to revive 1 lakh stalled housing units, benefiting homebuyers and developers facing liquidity constraints.
• TDS on Rental Income Increased: Raising the TDS limit on rent from ₹2.40 lakh to ₹6 lakh will ease compliance burdens and improve rental housing investments.
• Tax Exemption on Two Self-Occupied Properties: Homeowners can now claim tax benefits on two properties instead of one, reducing tax burdens and promoting real estate investments.
• Expansion of GCCs in Tier-2 Cities: Will drive commercial real estate demand in emerging cities, boosting office space and warehousing needs.
• Digitization of Land Records: Expected to enhance transparency and efficiency in real estate transactions, boosting homebuyer confidence.

Industry Reactions

Dr. Niranjan Hiranandani, Chairman, NAREDCO & Hiranandani Group

The budget strengthens infrastructure investment and real estate demand, with the SWAMIH Fund 2.0 ensuring the completion of stalled projects. However, inadequate long-term investment and the absence of affordable housing incentives remain concerns.

Domnic Romell, President, CREDAI-MCHI

The increase in income tax exemption and rental TDS limits will benefit middle-class homebuyers and landlords. The SWAMIH Fund’s expansion is a welcome move, but further policy reforms, including GST rationalization, are needed to unlock the sector’s full potential.

Prashant Sharma, President, NAREDCO Maharashtra

While tax relief and urban development initiatives are positive steps, the budget lacks direct incentives like industry status and single-window clearances that could have accelerated real estate growth.

Badal Yagnik, CEO, Colliers India

The budget furthers the vision of ‘Viksit Bharat’ with reforms in urban development, taxation, and regulatory frameworks. The SWAMIH Fund extension and Urban Challenge Fund will accelerate real estate growth, while rationalized taxes will spur investments in residential real estate and REITs.

Shrinivas Rao, CEO, Vestian

The budget’s focus on employment generation, infrastructure, and increased disposable income will drive demand across all real estate segments. Additionally, the SWAMIH Fund and digitization of land records will strengthen homebuyer confidence. Infrastructure upgrades, particularly in air cargo, will fuel warehousing demand nationwide.

Piyush Bothra, Co-Founder & CFO, Square Yards

The zero-tax provision up to ₹12 lakh will boost homebuyers’ purchasing power. The ₹15,000 crore SWAMIH Fund is a crucial intervention for stalled projects, but increased home loan deductions could have further enhanced affordability and eased credit constraints.

Rohan Khatau, Director, CCI Projects

Infrastructure spending and PPP initiatives are welcome, but key reforms such as stamp duty rationalization and higher home loan interest deductions were expected. The sector may require mid-year policy interventions.

Vikas Sutaria, Founder, Irah Lifespace

The budget lacks incentives for NRI and HNI investments in luxury real estate. While TDS rationalization helps, easing investment norms for these segments could have further boosted the sector.

Shraddha Kedia-Agarwal, Director, Transcon Developers

The Urban Challenge Fund and infrastructure-focused projects will drive growth, but the real estate sector still needs tax rebates and industry status for sustained expansion.

Samyak Jain, Director, Siddha Group

The revamped tax structure and middle-class benefits will increase disposable income, empowering homebuyers and fueling sectoral growth.

Abhishek Jain, COO, Satellite Developers

The budget’s emphasis on urban development and tax relief is positive, but liquidity issues, taxation burdens, and policy hurdles remain. A more comprehensive real estate policy is required.

Manju Yagnik, Vice Chairperson, Nahar Group & Senior VP, NAREDCO Maharashtra

The budget strengthens economic resilience with its focus on infrastructure. However, a targeted housing policy and tax incentives would have further fueled real estate growth.

Rajiv Agrawal, Co-Founder, Saarathi Realtors

The tax relief and SWAMIH Fund 2.0 will make homeownership more accessible, unlocking new investment opportunities in real estate.

Anuj Puri, Chairman, ANAROCK Group

The budget focuses on economic growth, consumption, and infrastructure but lacks major announcements for affordable housing, leaving stakeholders hoping for mid-year interventions.

Conclusion

The Union Budget 2025-26 introduces significant tax relief and urban development initiatives, indirectly benefiting the real estate sector. However, industry experts believe the absence of direct incentives—such as higher home loan deductions, single-window clearances, and GST rationalization—limits the sector’s full growth potential. While the middle class gains from tax relief, developers and investors look forward to further structural reforms to sustain long-term real estate momentum.

Also Read: budget expectations for real estate

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While optimism about economic growth has dipped from 79% in 2024 to 71% in 2025, the enduring appeal of real estate as a stable, wealth-building asset remains evident. Most respondents continue to see India as the fastest-growing major economy, with GDP growth projections between 6% and 6.5%.

Capital Appreciation a Key Driver

Capital appreciation remains a pivotal factor for real estate investments, with 55% of respondents citing it as the primary motivation, an increase from 44% last year. Almost half expect returns between 12% and 18%, while 38% anticipate returns below 12%. Fewer than 15% expect returns exceeding 18%, reflecting tempered expectations after several years of robust market performance.

“India’s luxury real estate market is set for continued growth, albeit with cautious optimism,” said Amit Goyal, Managing Director of India Sotheby’s International Realty. “Demand for bespoke luxury assets, including spacious farmhouses and gated villas in hill and beach destinations, is expected to be a key trend in 2025.”

Surge in Second Homes and International Properties

The survey also highlighted growing interest in second homes, with 55% of respondents favoring properties within a four-hour drive for convenience. Popular choices include hill and beach destinations.

International real estate interest has risen notably, with 22% of respondents expressing plans to invest abroad, up from 10-11% historically. Dubai has overtaken London as the top global choice, followed by U.S. cities.

Luxury Real Estate as a Lifestyle and Investment Asset

Luxury real estate remains a preferred investment avenue for lifestyle upgrades and wealth creation. The number of UHNIs in India reached 13,600 in 2024, with a projected 50% increase by 2028. Rising affluence and the growing influence of young wealth creators under 40 are shaping the demand for high-end properties.

“Luxury real estate is no longer just a status symbol but a robust investment avenue,” said Ashwin Chadha, CEO of India Sotheby’s International Realty. “From self-built bungalows to high-rise apartments and gated villas, the segment has evolved to offer world-class amenities and assured quality.”

Broader Economic and Market Trends

Despite concerns over inflation, 71% of respondents expect interest rates to ease gradually. Meanwhile, 36% of HNIs plan to allocate surplus funds to real estate in the next two years, highlighting its role as a tangible asset amid market volatility.

As India’s luxury real estate market continues to evolve, it reflects the country’s growing wealth and aspirations, offering opportunities for both lifestyle enhancements and capital gains.

Also Read: Akshay Kumar real estate

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Focus on Infrastructure and Economic Growth
Despite declining real estate activity in the second half of 2024, the sector anticipates the government will prioritize robust infrastructure development, a long-term driver for real estate growth. The budget is also expected to include measures to stabilize the economy and enhance GDP growth, with a focus on supporting SMEs, MSMEs, job creation, and skilling initiatives.

Affordable Housing in Need of Revival
Affordable housing, a once-thriving segment, has struggled post-pandemic, with its sales share in the top seven cities dropping to 18% in 2024 from over 38% in 2019, according to ANAROCK Group data. The supply of affordable homes has also declined significantly.

To address these challenges, industry experts are calling for targeted government intervention, including:

• Reintroducing the Credit-Linked Subsidy Scheme (CLSS): This scheme, which expired in 2022, provided financial incentives for first-time buyers of affordable homes. Its revival could stimulate demand in this segment.
• Restoring the 100% Tax Holiday for Developers: Developers previously benefited from tax exemptions under Section 80-IBA of the Finance Act, 2016, which helped increase affordable housing supply. Reinstating this provision could boost developer interest in such projects.
• Revising Affordable Housing Criteria: Current definitions of affordable housing, particularly the price cap of INR 45 lakh, are considered outdated in high-cost markets like Mumbai. Experts suggest raising the price cap to INR 85 lakh in Mumbai and INR 60-65 lakh in other metros to reflect market conditions.

The Road Ahead
ANAROCK Group Chairman Anuj Puri noted that centrally controlled land managed by agencies such as Indian Railways and the Port Trusts could be released for affordable housing projects, addressing land scarcity issues.

The slowdown in 2024 saw housing sales in the top seven cities decline by 4% to approximately 4.46 lakh units, while new launches dropped by 7% to around 4.13 lakh units. However, stakeholders believe that with the right incentives, 2025 could mark a turnaround for the residential real estate market.

The Union Budget 2025-26 holds the potential to reinvigorate the sector, fostering growth and ensuring housing remains affordable for all.

Also Read: Nirmala Sitharaman to present the union budget

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The workshop, led by Sanjeev Jaiswal, IAS, Vice President & CEO of MHADA, focused on strategies to accelerate housing delivery, urban redevelopment, and infrastructure development within MMR. This initiative aims to propel the region’s GDP from $140 billion in 2023 to $300 billion by 2030, while delivering 3 million affordable homes and addressing the severe housing shortages in the region.

Ambitious Affordable Housing Targets

Jaiswal outlined MHADA’s ambitious goals for 2030, which include delivering 8 lakh affordable housing units across Mumbai and surrounding areas. Of these, 2.2 million homes will be created through slum rehabilitation (SRA), while 800,000 homes will come from MHADA’s own affordable housing schemes in collaboration with CIDCO. He stressed that private developers’ involvement would be crucial to achieving these targets, particularly in a region with significant untapped potential for housing development.

A key focus of the MMR Growth Hub Project is affordable housing. Jaiswal emphasized that MHADA is pivoting toward a diverse range of housing solutions to cater to the varying needs of MMR’s population, including rental housing, student accommodations, working women’s hostels, studio apartments, industrial housing, and old-age homes. These solutions are aimed at providing affordable living options for a wide spectrum of income groups.

To make housing more accessible, Jaiswal highlighted the need to revisit building permissions, premium charges, and taxes like GST, which he believes could significantly reduce the overall cost of housing. He also stressed that efficient collaboration between government agencies and private developers will be vital for the smooth and timely execution of redevelopment projects.

Fostering Collaboration and Addressing Challenges

The workshop also focused on the challenges faced by stakeholders in the housing and redevelopment sector. Milind Shambharkar, IAS, Chief Officer of the Mumbai Building Repairs & Reconstruction Board, addressed regulatory hurdles that are hindering redevelopment efforts. He pointed to the need for policy reforms to expedite stalled projects, particularly in relation to the 33(7) and 33(9) provisions for redevelopment. He also proposed amendments that would allow faster approvals and smoother implementation of projects.

Shambharkar stressed the importance of 91(A), which mandates the demolition of unsafe buildings, to protect public safety. Additionally, he proposed the creation of an online portal to streamline the approval process for redevelopment proposals, improve transparency, and efficiently manage citizen grievances related to housing projects.

Sustainable Urban Development and Cluster Redevelopment

Milind Borikar, IAS, Chief Officer of the Mumbai Board, MHADA, further elaborated on the housing goals set for 2030, particularly the target of delivering 8 lakh units. He emphasized that redevelopment would play a central role in achieving these targets, with the development of 2,000 hectares of land earmarked for cluster-based redevelopment. This approach will not only ensure sustainable urban planning but also facilitate necessary infrastructure upgrades, such as roads, utilities, and public amenities, to support the growing population in MMR.

Borikar stressed that government collaboration to reduce project costs would be instrumental in making housing more affordable for middle- and low-income families. He also pointed to the significant potential of the MMR region to accommodate more housing units, given the underutilized areas and the need for efficient land use.

Innovative Housing Models for MMR’s Evolving Needs

In his concluding remarks, Anil Wankhede, Deputy CEO of MHADA, spoke about the importance of innovative housing models to meet the diverse needs of MMR’s population. He outlined plans for developing rental housing, student hostels, shared units, and industrial housing, which align with the region’s evolving urban demands. He also reiterated the pivotal role of cluster redevelopment in optimizing land use and creating integrated urban spaces, which can accommodate both residential and commercial needs.

Wankhede also emphasized that collaboration with private developers will be key in addressing challenges like stalled projects and surplus tenements, ensuring that redevelopment efforts are not delayed and the full potential of the MMR region is realized.

A Call for Collaboration and Commitment

The workshop concluded with a strong call for collaboration among government agencies, private developers, and citizens to meet the ambitious targets set for the MMR Growth Hub Project. MHADA reaffirmed its commitment to delivering affordable housing, redeveloping urban spaces, and contributing to Maharashtra’s broader economic and social transformation by 2030.

As the workshop demonstrated, the MMR Growth Hub Project represents a major step towards not only addressing Mumbai’s housing crisis but also driving the region’s economic growth and urban development. The success of this initiative will hinge on the active participation of all stakeholders and the creation of an enabling environment for faster and more affordable housing development.

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Stability in Borrowing Costs

For developers and homebuyers alike, the unchanged repo rate ensures stability in borrowing costs. With the rate at 6.5%, developers benefit from consistent financing conditions, allowing them to plan projects and investments with greater certainty. Similarly, homebuyers can count on steady mortgage rates, which helps maintain buyer sentiment in a challenging economic environment.

The neutral stance from the RBI reflects a careful balancing act—keeping inflation under control without stifling economic growth. While this strategy helps create a stable economic environment, it also means that home loan borrowers will continue to pay relatively high Equated Monthly Installments (EMIs), limiting affordability for many potential buyers. This dampens hopes for an increase in demand, particularly among first-time homebuyers who could have been encouraged by lower interest rates.

Developer Optimism Amid Government Initiatives

Despite the absence of a rate cut, developers remain cautiously optimistic about the sector’s growth trajectory. Government initiatives, including infrastructure development and urbanization, continue to support the real estate market. The sector has already seen significant investments, particularly in the residential segment, thanks to the current interest rate levels.

The neutral stance is seen as a boon for the affordable and mid-segment housing markets. It ensures that demand remains stable, even as the sector contends with inflationary pressures and price fluctuations in raw materials. Developers also hope that the government will offer more incentives, such as tax relief and policy support, to further stimulate demand.

“The RBI’s decision to maintain the repo rate at 6.5% reflects a measured approach to managing inflation without hampering economic growth. The neutral stance provides much-needed stability in the financial markets, which is crucial for the real estate sector. The unchanged rates will help maintain buyer sentiment, especially in the affordable and mid-segment housing categories,” said the President of NAREDCO Maharashtra.

The RBI’s approach is also seen as a positive signal for commercial real estate, with steady borrowing costs supporting momentum across both residential and office segments. Developers continue to launch new projects, and investor confidence remains high, particularly in grade-A office spaces.

Benefits for Luxury and Holiday Homes

While the neutral stance on rates ensures stability for most segments, it is especially favorable for the luxury and holiday home markets. Stable interest rates enhance buyer confidence, making it easier for potential investors to commit to high-end real estate. Markets in emerging areas such as Alibaug and Lonavala, which have witnessed increasing interest in luxury properties, stand to benefit from this stability.

“The decision to keep the repo rate unchanged is a welcome move, especially for the luxury and holiday home markets. Stability in interest rates enhances buyer confidence, particularly in emerging markets like Alibaug and Lonavala, which have been witnessing increased interest in these segments,” said the Founder of Iraah Lifespaces.

As buyers in premium segments are less sensitive to changes in interest rates, they are more likely to proceed with transactions despite the overall economic uncertainty. This stability also helps developers plan innovative and high-value projects without the pressure of fluctuating interest rates.

Challenges in Affordable Housing

The absence of an expected rate cut is disappointing for those in the affordable housing sector, where lower interest rates could have spurred greater demand. Higher home loan rates continue to impact the affordability of homes for the middle and lower-income segments. Industry leaders had hoped that a reduction in the repo rate would ease liquidity and provide an additional push to the housing sector, particularly for affordable housing projects.

The Co-Founder and CEO of Build Capital emphasized that while the neutral stance is a positive for maintaining steady borrowing costs, the industry also looks forward to long-term measures that could enhance liquidity and credit flow in the market.

“The RBI’s neutral stance and focus on balancing inflation and growth are positive signals for the real estate sector, ensuring stable home loan rates as well. With repo rates unchanged, stable borrowing costs will sustain momentum across residential and commercial segments. We urge the RBI to consider long-term measures to enhance liquidity and credit flow in the industry,” said the CEO of Build Capital.

Liquidity Support via CRR Cut

In a related move, the RBI reduced the Cash Reserve Ratio (CRR) by 50 basis points to 4%. This reduction enhances the liquidity available to banks, allowing them to lend more to the real estate sector. While the rate cut was not as significant as many hoped, the CRR reduction is expected to provide a boost to credit disbursements, especially in sectors like real estate, where financing plays a crucial role.

Anuj Puri, Chairman of ANAROCK Group, noted that while a repo rate cut would have provided a more immediate stimulus to housing sales, the CRR reduction could still have a positive impact by improving credit flow. He added that the sector was already buoyed by pent-up demand and improved affordability, with many expecting that the final quarter of the financial year would continue to show strong housing sales.

Impact on Major Markets

The unchanged repo rate ensures that large markets such as Mumbai and Pune will continue to see sustained demand, even as home prices rise. As per reports, average housing prices in major cities had already increased by 23% in the third quarter of 2024. In this scenario, the stability in interest rates ensures that homebuyers are not deterred by rapidly rising costs, while developers are not forced to hike prices further.

“Stability in interest rates is particularly beneficial for high-value markets like Mumbai and Pune. With steady interest rates, buyer confidence will likely increase, driving steady demand and supporting sector growth,” said the Joint Managing Director of Supreme Universal.

In Mumbai, the residential real estate market is seeing strong momentum, with low unsold inventory and a continued demand from end-users. Infrastructure projects such as metro expansions are expected to further boost the demand for housing in key residential areas.

Looking Ahead

While the RBI’s decision to hold the repo rate steady was expected, it has left some segments of the real estate market hoping for more decisive action. As developers continue to navigate a challenging economic environment, they are calling for more government support, particularly in terms of tax incentives, faster approvals, and more favorable liquidity conditions. The sector’s optimism remains high, buoyed by robust demand across urban markets and government-backed infrastructure initiatives.

“The RBI’s decision to retain the repo rate at 6.5% is a balanced approach to manage growth and inflation. With India’s GDP expected to grow at 6.5–7% in FY 2024-25, this stability is vital for maintaining economic momentum. A steady rate ensures consistent repayment terms, which increases the confidence of homebuyers and encourages investments in the sector,” said the Vice Chairperson of Nahar Group.

Overall, the RBI’s neutral stance on the repo rate is seen as a double-edged sword for the real estate sector. While stability in borrowing costs provides confidence to developers and homebuyers, the lack of a rate cut means that affordability challenges remain for many. Nevertheless, the sector remains resilient, with stakeholders expressing hope that the government will continue to offer supportive policies to sustain growth in the coming years.

Also Read: RBI MPC Meeting Begins Repo Rate Likely to Remain Unchanged, with Real Estate Sector Watching Closely

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