“The committee noted that the global environment has deteriorated since the last policy meeting with the conflict lingering amidst a fragile truce. The adverse implications of the extended disruption in supply chains and elevated energy prices are reflected in the moderation of growth and increase in inflation projections from the April policy,” Governor Malhotra stated.

This decision to maintain the repo rate serves as a critical anchor for India’s residential real estate sector, which continues to witness strong annual growth despite short-term geopolitical shocks. The rate pause provides stability amid rising consumer pressures and volatile construction environments.

Impact on Homebuyers and Home Loans

The repo rate is the interest rate at which the Reserve Bank of India lends short-term funds to commercial banks. When the RBI changes the repo rate, it directly influences the cost of borrowing for banks, which in turn affects the interest rates they charge on loans, including home loans.

With the repo rate unchanged at 5.25%, banks are expected to keep their lending rates, such as those linked to the Marginal Cost of Funds-based Lending Rate (MCLR) or External Benchmark Lending Rate (EBLR), stable in the near term. This means home loan EMIs for buyers will remain predictable and manageable, shielding them from immediate upward pressure on borrowing costs.

For homebuyers, this stability is particularly welcome. In an environment of elevated global oil prices and rising domestic construction costs due to the Middle East conflict, stable financing prevents additional strain on monthly budgets. Potential buyers who had paused their decisions due to uncertainty can now move forward with greater confidence, as borrowing costs are not being hiked.

Real Estate Sector Outlook

The residential real estate sector has delivered mixed but resilient performance. According to Pankaj Kumar, VP – Fundamental Research at Kotak Securities, listed developers reported 16% YoY pre-sales growth in Q4FY26, taking full-year FY26 pre-sales to Rs 1.37 lakh crore (up 17% YoY). While industry sales grew 5% in FY26, this was largely price-led, with volumes declining 3%. Inventory levels remain healthy at 21 months, and developers maintain strong balance sheets. The FY27 launch pipeline of Rs 2 lakh crore supports expectations of continued 17% pre-sales growth.

Anuj Puri, Chairman of Anarock Property Consultants, noted that residential sales in Q1 2026 stood at approximately 1,01,675 units, reflecting a 7% QoQ decline but a healthy 9% YoY growth. Sales value reached INR 1.51 lakh crore. New project launches surged 26% YoY, pushing unsold inventory beyond 6.01 lakh units. “The MPC’s policy consistency is a stabilising buffer. Input costs are rising… but domestic consumer demand is fundamentally resilient,” Puri added.

Dharmendra Raichura, VP & Head of Finance at Ashar Group, said, “RBI’s decision to maintain the repo rate at 5.25% reflects a calibrated approach… Predictable borrowing costs support efficient project planning and timely execution, while buyers continue to benefit from stable lending rates and manageable EMIs.”

Rising geopolitical uncertainty has also paused some Middle Eastern investments in Indian housing, but the stable rate environment helps developers manage higher material costs and supports the sector’s growth story through 2026.

Overall, the RBI’s decision provides much-needed policy stability, enabling homebuyers to benefit from steady home loan rates while the industry absorbs new supply and maintains momentum.

Also Read: Housing sales momentum to continue as RBI holds repo rate

The post RBI Holds Repo Rate at 5.25%: Relief for Homebuyers Amid Geopolitical Pressures appeared first on Square Feat India.

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

The post RBI Holds Repo Rate at 5.5% — Home Loan Interest To Remain As It Is appeared first on Square Feat India.

While inflation remains subdued, several headwinds persist: corporate investment remains weak, and industrial output has slowed significantly, undermining growth momentum The Times of India.

Industry Voices: Mixed Signals on the Rate Path Ahead

Akhil Saraf, Founder & CEO, Reloy

He argues that, with inflation low and private investment depressed, a “substantial rate cut” is warranted. Lower rates, he says, would revive borrowing, boost demand and restore private-sector confidence — a “decisive push” at a critical juncture.

Vimal Nadar, National Director & Head of Research, Colliers India

Nadar notes that while the RBI has already delivered 100 bps of easing in 2025, including the June move to 5.50%, the bank is likely to maintain a neutral stance for now. Lower financing costs will benefit real estate developers, lenders and homebuyers—especially ahead of the festive housing season in late 2025.

Shrinivas Rao, CEO, Vestian

Rao emphasizes external headwinds, notably U.S. tariffs, urging caution. He expects the RBI to hold rates steady in the near term to maintain macro resilience but leaves room for rate cuts if inflation continues its downward trajectory.

Piyush Bothra, Co‑Founder & CFO, Square Yards

Bothra concurs on a wait-and-watch posture at 5.50%, given global uncertainties and incomplete transmission of earlier cuts. He sees a 25 bps rate cut in October as plausible—timed to support housing demand during the festive quarter.

Macro Context: The Tightrope Between Growth and Inflation

• Inflation trends: Inflation has moderated sharply—from ~3.16% in April to ~2.10% in June—providing the RBI room for further easing Reuters+4Reuters+4Reuters+4Reuters+1Jiraaf+1.
• Growth signals: While Q1 FY26 GDP expanded ~7.4%, industrial production slowed to a 10‑month low (~1.5%), raising concerns about underlying demand The Times of India.
• Global uncertainties: Elevated U.S. tariffs and trade shot at India pose headwinds; economists expect the RBI to monitor spillover risk before easing further ReutersThe Economic Timesdeccanherald.com.
• Policy shift: The RBI moved from an accommodative stance to “neutral” in June, suggesting further action would depend on incoming data rather than past momentum Reuters.

What Lies Ahead

• Markets largely expect the repo rate to stay at 5.50% in August, with approximately 75% of economists anticipating a hold during the MPC meeting on August 6 Reuters.
• Some forecasts—including one from SBI—suggest a 25 bps reduction later in August, to stimulate credit and give an “early Diwali” boost ahead of the festival season The Economic Times.
• Others, including Colliers, Vestian and Square Yards, see October as a more likely date for the next cut, contingent on inflation durability and full transmission of past rate moves.

Summary Table

Final Word

The RBI enters its August 6 Monetary Policy Committee meeting with subdued inflation firmly under control—but with growth signals and investment trends remaining worryingly soft. While most analysts expect the repo rate to remain unchanged at 5.50%, an October rate cut of 25 bps remains on the cards if inflation stays low and the RBI sees positive transmission.

Also Read: RBI Cuts Repo Rate by 25bps: A Boon for Homebuyers and the Real Estate Sector

The post RBI Expected to Hold Rates at 5.50%, but Experts See Case for Further Cuts appeared first on Square Feat India.

In a significant move that spells good news for homebuyers across India, the Reserve Bank of India (RBI) has slashed the repo rate by 25 basis points to 6%, marking its second consecutive cut. The decision, aimed at supporting economic growth amid global uncertainties, has been widely welcomed by real estate stakeholders for its potential to stimulate housing demand and improve affordability—especially for end-users in the affordable and mid-income segments.

Here’s what the real estate and financial leaders have to say:

A Welcome Move to Boost Buyer Sentiment

Prashant Sharma, President, NAREDCO Maharashtra, said the rate cut “comes as a welcome and timely move” and will act as a much-needed catalyst to revive both consumption and investment cycles. He emphasized its impact on improving affordability and boosting sentiment in the affordable and mid-income segments.

Shraddha Kedia-Agarwal, Director at Transcon Developers, called it a “strategic push” toward economic revival. “Lower interest rates make home loans more attractive, especially in metros like Mumbai. This will go a long way in supporting buyer sentiment and end-user driven purchases,” she added.

Boman Irani, President, CREDAI National, hailed the move as “pro-growth,” especially with inflation expected to moderate to 4.5%. He noted it would enhance borrowing capacity and uplift housing demand, particularly in rate-sensitive categories.

Transmission Still a Concern

Anuj Puri, Chairman, ANAROCK Group, struck a cautious tone. “Banks have not fully transmitted earlier rate cuts due to funding pressures and high NPAs. If they do now, it will help homebuyers—especially first-timers looking at affordable housing,” he noted. He also flagged a 17% average rise in housing prices across top 7 cities year-on-year, which makes rate transmission crucial for EMI relief.

Affordability and Access to Housing in Focus

Anurag Goel, Director, Goel Ganga Developments, said the move is especially beneficial for EMI-dependent homebuyers. “This will strengthen buyer confidence and improve conversion rates from inquiry to booking, particularly in Tier 1 and Tier 2 cities,” he noted.

Chintan Sheth, CMD of Sheth Realty, added that lower rates would “usher benefits across affordable, mid-income, and premium segments.”

Jash Panchamia, Promoter of Suraksha Smart City, emphasized the positive impact on PMAY beneficiaries and the EWS segment, saying it supports the government’s vision of ‘Housing for All’.

Real Estate Developers: Ready to Launch and Expand

Parthh K Mehta, CMD of Paradigm Realty, said this move creates opportunities in luxury housing, enabling developers to launch “iconic projects backed by favorable financing.”

Bhavesh Shah, JMD of Today Group, noted that the rate cut could significantly drive sales in growth hubs like Navi Mumbai.

Mohit Goel, MD, Omaxe Ltd., called it a “catalyst for demand revival,” adding that lower borrowing costs will ease financial burdens for both homebuyers and developers.

Macro Trends, Tariff Concerns, and Future Outlook

Vimal Nadar, Head of Research at Colliers India, explained that while global tariff escalations remain a concern, the RBI’s “accommodative” stance will help boost domestic consumption and housing demand.

Amit Goyal, MD, India Sotheby’s International Realty, agreed: “If passed on to borrowers, this cut will help the real estate sector navigate global economic uncertainty.”

Anshul Jain of Cushman & Wakefield emphasized the positive shift from “neutral” to “accommodative,” reinforcing the RBI’s growth-supportive intent and likely future rate cuts.

Shrinivas Rao, CEO of Vestian, said, “The policy shift and easing inflation suggest mortgage rates could drop further, enhancing real estate demand.”

Sanjay Daga, CEO of Anex Advisory, pointed out that further cuts may be needed to offset tariff pressures and stock market volatility.

For FD Investors: Time to Reassess Strategy

Aman Gupta, Director of RPS Group, warned that declining rates mean FD investors should revisit their strategies. He recommended exploring small finance banks for better rates, considering tax-efficient instruments like SCSS, and maintaining an emergency fund while diversifying into hybrid funds cautiously.

Bottom Line for Homebuyers:

• Lower EMIs could be on the horizon—if banks pass on the cut.
• First-time and budget-sensitive buyers stand to benefit the most.
• Developers gain breathing room, which may lead to new launches and faster project completions.
• Real estate remains a safe, long-term asset, especially amid global uncertainty.

Whether you’re looking to buy your first home or refinance an existing loan, this rate cut offers an opportunity to reassess your home finance strategy and potentially act before prices or interest rates climb again.

Also Read: RBI makes Homebuyers happy, Repo rates unchanged

The post RBI Rate Cut Brings Good News for Homebuyers: Lower EMIs appeared first on Square Feat India.

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

The post RBI’s Neutral Stance on Repo Rate: What It Means for India’s Real Estate Sector appeared first on Square Feat India.

Given the prevailing inflationary trends and the global economic landscape, market experts believe that the RBI’s decision will focus on maintaining stability. A stable repo rate is crucial for controlling lending rates, which directly impact consumer spending and corporate investments.

The real estate sector, in particular, is watching the MPC’s decision closely, with many anticipating a potential rate cut in the near future. The sector has shown resilience, but industry leaders emphasize that a reduction in the repo rate could provide a much-needed boost, especially for homebuyers in the affordable housing segment.

Industry Reactions to the Upcoming Decision

Manoj Gaur, CMD of Gaur Group and President of CREDAI NCR, stated that if the RBI maintains the repo rate, it will offer stability to the real estate market, helping build confidence among both developers and homebuyers. He added that while a rate cut could relieve homebuyers, particular attention must be given to the affordable housing segment.

Pradeep Aggarwal, Founder and Chairman of Signature Global (India) Ltd., echoed these sentiments, pointing out that the stability in the monetary policy has contributed to India’s resilience amid global uncertainties. He believes that any easing of interest rates could further stimulate the demand for housing, particularly in urban areas.

Amit Modi, Director of County Group, expressed optimism about a potential rate reduction, especially for the affordable housing market. He noted that while the luxury housing market may not see significant changes, a rate cut could reignite demand in the mass housing sector.

Impact on Homebuyers and Investors

Sanjay Sharma, Director of SKA Group, emphasized that a reduction in the repo rate would make home loans more affordable by lowering EMIs, thereby making homeownership more accessible. This, he argued, would not only strengthen consumer confidence but also accelerate growth in the real estate sector.

Rajjath Goel, Managing Director of MRG Group, pointed to the impressive 32% surge in housing prices in Delhi-NCR, attributing it to large-scale infrastructure projects and increasing buyer sophistication. He said that a rate cut would bring further stability to the market and attract long-term investments.

Mohit Kalia, Vice President of Raheja Developers, expressed similar views, stating that a reduction in the repo rate would ease the burden on homebuyers and stimulate investment. He added that such a move could help stabilize real estate prices, which have been fluctuating in recent months.

Sectoral Growth and Future Prospects

Dr. Gautam Kanodia, Founder of KREEVA and Kanodia Group, said that lower interest rates would act as a catalyst for further housing demand, particularly in emerging markets and smaller cities. This, he believes, would strengthen the housing sector’s growth trajectory.

Saurabh Saharan, Group Managing Director of HCBS Development, highlighted that the stability in the market over the past two years, driven by the RBI’s consistent approach, had been crucial for investor and homebuyer confidence. He is hopeful that a potential rate reduction would further encourage people to enter the market.

Ravindra Gandhi, Managing Director of Tirasya Estates, noted that the real estate sector had flourished, particularly in Tier-2 cities like Goa, Lucknow, and Chandigarh. He said that any move by the RBI to reduce or maintain the rate would continue to foster growth in these emerging markets.

Overall Economic Impact

Experts agree that the RBI’s upcoming decision will be pivotal not only for the real estate sector but also for the broader economy. The potential for a rate cut is seen as a step toward fostering economic growth, particularly in sectors like infrastructure and housing, which are key drivers of India’s economic progress.

Piyush Kansal, Executive Director of Royale Estate Group, suggested that the real estate sector had benefited from RBI’s positive stance in the past two years. If the RBI decides to lower rates, it would not only ease the financial burden on homebuyers but also stimulate the overall market, benefiting developers, investors, and consumers alike.

Ashwani Kumar of Pyramid Infratech added that a reduction in the repo rate would help enhance market liquidity and investor confidence, promoting long-term economic stability in the real estate sector.

Looking Ahead

As the RBI prepares to make its announcement, businesses and investors are staying vigilant, planning for the potential easing of financial conditions. The real estate sector is particularly focused on the implications of any rate changes, with many hoping for a move that will further fuel the sector’s ongoing growth.

While the RBI’s decision remains uncertain, the outcome of this MPC meeting is expected to have lasting effects on the Indian economy, particularly in real estate and housing markets, which are closely linked to consumer sentiment and investment patterns.

Also Read: RBI’s Upcoming Monetary Policy Announcement: Implications for the Housing Market

The post RBI MPC Meeting Begins Repo Rate Likely to Remain Unchanged, with Real Estate Sector Watching Closely appeared first on Square Feat India.

Anuj Puri, Chairman of ANAROCK Group, highlighted that the fundamentals of the Indian economy remain strong despite global challenges. He noted that while a rate cut would have been ideal, the RBI’s cautious stance is understandable given various macroeconomic factors. The unchanged repo rate is expected to help maintain momentum in the housing market during the festive season, especially amid rising housing prices and declining sales.

In Q3 2024, average housing prices in the top seven cities surged by 23%, reaching approximately INR 8,390 per sq. ft., up from INR 6,800 per sq. ft. a year earlier. Despite this price increase, residential sales fell by 11% compared to Q3 2023, and new property launches decreased by 19%.

The consistent home loan rates provide essential support for demand during the festive quarter, with expectations for faster sales momentum in Q4 2024. Last year’s festive quarter saw over 1.27 lakh units sold across the top seven cities, and the current stability in interest rates is anticipated to encourage similar or even higher demand this year.

Dharmendra Raichura, Vice President and Head of Finance at Ashar Group, emphasized that the RBI’s stable approach promotes overall economic stability while keeping inflation in check. The RBI has maintained its inflation forecast at 4.5% for FY2025, alongside a solid GDP growth projection of 7.2%. This steady rate is expected to foster a favorable environment for sustainable growth in the real estate sector.

The Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO Maharashtra Manju Yagnik, stated that the decision to keep the repo rate steady is a positive step for the real estate sector amid ongoing global economic uncertainties. This consistency is particularly important as the festive season, a peak time for home purchases, approaches. By maintaining manageable EMIs, potential homebuyers are encouraged to invest, particularly in the affordable housing segment. Furthermore, this stability benefits developers by improving cash flow and reducing borrowing costs for ongoing projects, ultimately supporting the growth trajectory of India’s housing market.

Also Read: RBI’s Upcoming Monetary Policy Announcement: Implications for the Housing Market

Here’s more comments from the industry.

“RBI’s decision to maintain the policy rate at 6.5% while shifting its stance to ‘neutral’ is a balanced approach that takes into account the current macroeconomic conditions and future outlook. This shift provides much-needed flexibility, allowing the RBI to respond swiftly to evolving inflation trends. For the real estate sector, this decision is particularly important as it signals a steady interest rate environment, which can help sustain the ongoing demand for home loans. A continued focus on stability in the financial ecosystem, along with a projected GDP growth of 7.2% for FY25, provides a positive outlook for the real estate sector.” — Prashant Sharma, President, NAREDCO Maharashtra

“The RBI’s decision to maintain the key policy rates reflects an assessment of the current macroeconomic conditions and future outlook. The continuation of the current policy rate at 6.5% ensures stability, while the potential for rate adjustments based on future inflationary data is a positive signal for the real estate sector.” — Deepak Nair, COO & Co-Founder, The Mentors Real Estate Advisory Pvt. Ltd.

“The RBI’s decision to maintain the policy rate at 6.5% is a strategic move that signals the central bank’s readiness to navigate changing economic conditions. This stable interest rate environment should bolster market confidence, allowing developers and homebuyers to plan with more certainty.” — Anil Mutha, Chief Visionary & Co-Founder, Nandivardhan Group

“The RBI’s decision to maintain the policy rate at 6.5% reflects a nuanced understanding of the current economic scenario. A stable policy rate ensures a favorable lending environment, supporting homebuyers’ sentiment.” — Shraddha Kedia-Agarwal, Director, Transcon Developers

“The real estate market has demonstrated strong performance, fueled by rising demand for homeownership and increasing income levels. We are optimistic about a surge in demand in the coming months.” — Samyak Jain, Director, Siddha Group

“The RBI’s decision to maintain the repo rate at 6.5% helps balance inflation with support for growth. It enhances consumer confidence and encourages investment in property.” — Rohan Khatau, Director, CCI Projects

“RBI’s decision to maintain the policy rate at 6.5% marks a strategic move to balance growth and inflation dynamics. A stable interest rate environment is vital for sustained momentum in housing demand.” — Govind Krishnan Muthukumar, Co-founder & Director, Tridhaatu Realty

“RBI’s decision to maintain the repo rate at 6.5% emphasizes its role in controlling inflation and sustaining economic growth. This will further motivate potential buyers to pursue homeownership.” — Himanshu Jain, VP – Sales, Marketing and CRM, Satellite Developers Private Limited

“The RBI’s decision to hold the repo rate brings cheer among homebuyers, as the relatively affordable home loan interest rate regime will continue during the festive season.” — Rajiv Agrawal, Co-Founder, Saarathi Realtors

The post Repo Rate Unchanged – Housing Set for Festive Season appeared first on Square Feat India.

However, interest rates are just one piece of the puzzle. Property prices also play a critical role in influencing purchase decisions. According to ANAROCK Research, average residential property prices across the top seven cities in India have surged by 46% since 2021. More favorable interest rates could enhance overall affordability, potentially catalyzing housing sales during the upcoming festive season. Increased sales would benefit developers by improving cash flows and lowering borrowing costs for ongoing projects.

Moreover, a rate cut could revitalize market sentiment and attract investors back into the housing sector. Following years of stagnation, investors began returning to the market post-COVID-19, drawn by rising demand and prices. However, many have since adopted a cautious stance as property prices appear to have stabilized. More attractive lending rates could encourage these investors to re-engage with the market.

That said, experts urge caution. While recent cuts by the US Federal Reserve might suggest a similar move by the RBI, the global economic landscape is currently fraught with uncertainty due to ongoing geopolitical tensions. As such, the RBI may choose to maintain the current repo rate until these pressures subside.

As stakeholders await the announcement, the housing market remains on edge, hopeful for a boost that could drive sales and investment in the sector.

Note: This Article is based on the insights of Anuj Puri, Chairman, Anarock Properties

Also Read: Unchanged RBI Repo Rates: A Boon for Real Estate Growth

The post RBI’s Upcoming Monetary Policy Announcement: Implications for the Housing Market appeared first on Square Feat India.

In a resolute move aimed at preserving economic stability, the Reserve Bank of India’s (RBI) Monetary Policy Committee (MPC) has decided to keep the policy repo rate unchanged at 6.5% for the ninth consecutive meeting. This decision, reached by a 4:2 majority, reflects the central bank’s cautious stance in the face of global economic uncertainties. The impact of this policy on the real estate sector is anticipated to be substantial, influencing borrowing costs and shaping investment sentiments as developers and homebuyers adjust to the current interest rate climate. Here’s how real estate experts are reacting to the announcement.

Here’s what real estate industry go to say on the repo rate.

Dr. Niranjan Hiranandani, Chairman, NAREDCO and Hiranandani Group, “The RBI’s decision to maintain the repo rate unchanged acts as a stabilizing force amidst the current volatile global economic environment. With concerns such as potential U.S. recession, the Bangladesh crisis affecting regional capital flows, and broader global uncertainties, stable home loan interest rates provide much-needed predictability. Although a lower repo rate could have boosted affordable housing, which has been impacted by higher interest rates, the current stability is crucial for NRI investors navigating fluctuating foreign exchange rates. This steady environment creates opportunities for both long-term and short-term real estate investments. However, it is essential for stakeholders to remain vigilant and closely monitor inflation trends, fiscal policies, and global economic developments to adapt their strategies effectively.”

Anuj Puri, Chairman – ANAROCK Group, “The RBI’s decision to maintain the repo rate at 6.5% for the ninth consecutive time is a positive development for the housing industry. This consistency in borrowing costs will encourage more aspiring homebuyers, particularly in the affordable segment, and drive demand in the housing market. Coupled with the recent announcement on indexation benefits, which reduces capital gains tax burdens and enhances the appeal of real estate investments, we can expect increased investor confidence and capital flow into the sector. This combination of stable interest rates and favorable taxation is set to boost housing demand, stimulate project construction, create job opportunities, and contribute to broader economic growth. The high housing sales across the top 7 cities in H1 2024 and the significant rise in residential prices further underscore the positive impact of these measures.”

Dharmendra Raichura, Vice President of finance of Ashar Group, said, “The Reserve Bank of India’s (RBI) decision to maintain the repo rate at 6.5% for the ninth consecutive time demonstrates its dedication to achieving the 4% Consumer Price Index (CPI) target. Despite a slight increase in headline inflation to 5.1% in June 2024, the central bank’s commitment to economic stability is evident. With GDP growth projected at 7% in FY25 and inflation at 4.5%, the stable interest rate environment fosters long-term investments in housing. As a real estate developer, we appreciate the significance of a steady repo rate, which influences borrowing costs and impacts the property market. The consistent repo rate provides a favorable environment for sustainable development and growth in the real estate sector.”

Saket Dalmia, President of India Sotheby’s International Realty, “The RBI’s decision to maintain the policy rate aligns with expectations given the current inflation and global economic scenario. While the near-term outlook for global growth appears positive, challenges persist in the medium term due to demographic shifts, climate change, and geopolitical tensions. Despite these factors, domestic economic activity remains resilient. The MPC’s focus on maintaining a disinflationary stance to ensure inflation aligns with targets while supporting growth underscores the importance of stable interest rates. This stability is particularly beneficial for the real estate sector. We support the RBI’s current stance and anticipate that future rate cuts will further bolster the real estate sector and contribute to overall economic stability and growth.”

Vimal Nadar, Senior Director & Head of Research at Colliers India, “Amid swift changes in global economic undercurrents and a moderate global economic outlook, the RBI’s decision to keep benchmark lending rates at 6.5% for the ninth consecutive time reflects a cautious stance. Although inflation remains above the benchmark of 4%, the RBI’s projection of a 7.2% GDP growth rate for FY 2025, supported by strong high-frequency economic indicators, is promising. The stability in interest rates, along with recent moves to rationalize stamp duty charges and provide concessions for women homebuyers, is favorable for the real estate sector, especially the residential segment. The partial withdrawal of revised LTCG tax applicability also provides room for increased housing sales with minimal tax impact, likely boosting investor and homeowner sentiment throughout 2024.”

Shrinivas Rao, FRICS, CEO of Vestian, “The RBI’s decision to keep the repo rate unchanged at 6.5% for the ninth consecutive time reflects a response to persistent inflation, elevated food prices, and global macroeconomic uncertainties. The steady monetary policy over the past year and a half has provided stability in the real estate sector, fostering demand across all asset classes. This positive momentum is expected to continue as the repo rate is likely to remain stable in the near term, despite rising inflation and increasing geopolitical frictions in the Middle East.”

Prashant Sharma, President, NAREDCO Maharashtra, “We welcome the RBI’s decision to keep the policy repo rate unchanged at 6.5%. This move reflects a cautious yet stable approach to monetary policy amidst global economic uncertainties. For the real estate sector, steady interest rates are a positive signal, creating a conducive environment for both homebuyers and investors. Maintaining this stability is crucial for fostering consumer confidence and ensuring sustained sector growth. We hope this decision will stimulate demand in the housing market, especially in the affordable and mid-segment categories, which are vital for the overall development of the industry.”

Pritam Chivukula, Vice President, CREDAI-MCHI and Co-Founder & Director, Tridhaatu Realty, “We welcome the RBI’s decision to keep the policy repo rate unchanged at 6.5%, which reflects a cautious and balanced approach. The real estate sector, particularly in metro cities like Mumbai, has been steadily reviving, and the current rate stability will help sustain this momentum. Homebuyers will continue to benefit from favorable lending rates, encouraging more investments in the housing market. However, we urge the government to consider additional supportive measures to enhance liquidity and provide long-term stability to the sector. Boosting consumer sentiment should be a focus, as it will drive growth in real estate and related industries.”

Rajeev Ranjan, Co-Founder & CEO, The Mentors Real Estate Advisory Pvt Ltd, “The decision by the Monetary Policy Committee to keep the policy repo rate unchanged at 6.5% is a balanced approach that reflects the current economic landscape. Stability in interest rates is crucial for maintaining buyer confidence and ensuring steady demand in the housing segment. While the unchanged repo rate continues to offer a favorable borrowing environment, it also signals the RBI’s intent to closely monitor inflation without disrupting growth. We anticipate that this stance will sustain the momentum in the real estate market, encouraging more homebuyers to take advantage of the existing financial conditions.”

Shraddha Kedia-Agarwal, Director, Transcon Developers, “We commend the RBI’s decision to maintain the policy repo rate at 6.5%. The real estate sector has demonstrated resilience amidst fluctuating economic conditions, and the stability in interest rates is a positive sign for both developers and homebuyers. This decision will help maintain the momentum in the housing market, encouraging potential buyers to invest in their dream homes with confidence. We remain optimistic that steady rates will continue to bolster the real estate sector and support overall economic recovery.”

Rohan Khatau, Director, CCI Projects, “The RBI’s decision to maintain the policy rate is a prudent step, as it helps control inflationary trends. The focus on managing inflation to support growth is commendable and will foster a favorable environment for the real estate sector, enabling growth and stability. We are optimistic that these measures will enhance consumer confidence and encourage homeownership, laying a strong foundation for future progress.”

Samyak Jain, Director, Siddha Group, “We welcome the RBI’s decision to maintain the policy repo rate at 6.5%, which reflects a positive approach toward sustaining economic growth while keeping inflationary pressures in check. The real estate sector has seen steady demand, and this RBI move provides continued stability, allowing homebuyers to benefit from favorable interest rates. We hope this stability will encourage more consumers to invest in real estate, driving further growth in the sector.”

Himanshu Jain, VP – Sales, Marketing, and CRM, Satellite Developers Private Limited (SDPL), “We welcome the RBI’s decision to maintain the key policy rate at 6.5%, which aligns with our economic growth policies. The focus on controlling inflation to stimulate growth will undoubtedly spur housing demand, benefiting both homebuyers and developers. We are optimistic that these policies will further enhance market confidence and drive sustained growth in the real estate industry.”

Also Read: Flex Spaces and Sustainability Drive Commercial Property Trends in APAC and India, Colliers Reports

The post Double Boost for Housing Sector: Stable Repo Rate and Indexation Benefits Fuel Market Optimism appeared first on Square Feat India.

Pritam Chivukula, Vice President of CREDAI-MCHI and Co-Founder & Director of Tridhaatu Realty, commended the RBI’s approach to balancing inflation control with growth support. “We acknowledge the housing sector’s success during the past few quarters and praise the recent government initiatives for boosting the real estate market. The RBI’s decision is a positive signal for the real estate sector. It will bolster consumer confidence and encourage investment in property,” he said.

The RBI’s steady stance is anticipated to encourage investment in real estate, as borrowing costs for consumers remain unaffected. This is expected to sustain the momentum in home purchases that has been observed over the past few quarters.

Welcoming the RBI’s decision, Aakash Patel, Director of Atul Projects India Pvt Ltd. said, “We believe that maintaining the repo rate will help control inflation and maintain liquidity, encouraging prospective home buyers to invest in their dream homes, thereby sustaining the positive trend in home sales. It provides a much-needed cushion for the real estate sector, potentially boosting residential as well as commercial property markets.”

Samyak Jain, Director of Siddha Group, praised the RBI for its role in controlling inflation and ensuring economic liquidity. “The real estate market has witnessed a robust performance, driven by increasing demand for homeownership and rising income levels. We are optimistic about a surge in demand in the coming months and anticipate this positive trajectory to continue in this year as well,” he said.
Homebuyers stand to benefit from this decision as it implies stable loan interest rates. The unchanged policy rates mean that the cost of borrowing will not increase, making it an opportune time for potential homeowners to secure loans at attractive rates.

Himanshu Jain, VP of Sales, Marketing, and CRM at Satellite Developers Private Limited (SDPL), expressed his approval of the RBI’s decision, noting its impact on controlling inflation and maintaining economic liquidity. He observed a peak in the festive and the post festive season sales and expects the RBI’s decision to further motivate potential buyers encouraging them to pursue homeownership.

Rohan Khatau, Director of CCI Projects, lauded the RBI’s prudent decision, which aligns with the current positive market sentiment and high home sales. He anticipates that the decision to hold the repo rate will make more funds available to potential home buyers. “This is a win-win for both builders and buyers. For builders, it means more liquidity and lower financing costs. For buyers, it ensures that home loans remain affordable,” he said.
While this move by the RBI is welcomed by the real estate sector, experts advise cautious optimism, keeping an eye on global economic trends and internal fiscal policies. The sector’s growth is contingent on a variety of factors, including overall economic stability and consumer sentiment.

The RBI’s decision to keep the key policy rates unchanged is a significant development for the real estate sector, fostering an environment conducive to growth and investment. As the sector navigates through the times ahead, the role of policy stability cannot be overstated in driving its success.
Overall, industry leaders are confident that the RBI’s decision will continue to foster a conducive environment for homebuyers, sustaining the momentum in the real estate sector.

Also Read: Housing sales momentum to continue as RBI holds repo rate

The post Unchanged RBI Repo Rates: A Boon for Real Estate Growth appeared first on Square Feat India.