Representative image for EMI
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Bengaluru: The Reserve Bank of India’s (RBI) decision to keep the repo rate unchanged at 5.25 per cent means that home loan EMIs will not change either. This will keep buyers engaged but does nothing to lift demand further and does nothing to make housing more affordable, says real estate consultancy Anarock.
The RBI Governor Sanjay Malhotra, on Friday, announced the unchanged repo rate policy and maintained its monetary policy stance at 'neutral'.
“The upside is that current house loan borrowers will not experience any EMI shocks for now, and new borrowers can plan their housing purchases with the benefit of predictability,” says Anju Puri, Chairman, Anarock Group.
Demand for affordable and mid-segment homes remains strong, but continues to be challenged by escalated pricing, which affects affordability. A rate cut would have potentially brought at least some fence-sitters back to the market, he says.
Overall trends show that affordable housing remained considerably subdued in 2025, in terms of both sales and new launches. As per ANAROCK Research, the overall sales share of affordable housing was just around 18 per cent of the total housing sales across cities in 2025. Back in 2024, out of the total sales of approx. 4.60 lakh units in top 7 cities, affordable housing share stood at 20 per cent. This share stood the highest in 2019 when out of approx. 2.61 lakh units sold altogether, 38 per cent was within this segment.
Union Budget 2026-27 failed to deliver any notable relief to the affordable housing buyer segment, which is in dire need of proactive intervention by way of interest stimulants for both buyers and developers. The segment needs focused, high-impact measures like tax breaks - for developers, so that they shift their focus more on affordable housing from the current premium and luxury segments, and for buyers, to improve affordability, Puri adds.
“The MPC delivered completely in line with expectations across rates and stance. The inflation outlook in H1FY27 has been revised up marginally. While uncertainty remains on the growth-inflation figures as we await the new series, the uptick in commodity prices and weaker currency may pose upside risks to inflation. We therefore see limited room for additional easing on the repo rate front, with RBIs focus expected to be on ensuring stability on the liquidity front in the year ahead,” says Upasna Bhardwaj, Chief Economist, Kotak Mahindra Bank
Shekhar G Patel, President CREDAI, says RBI’s decision to maintain the repo rate at 5.25 per cent provides policy stability amid global currency volatility and bond-yield pressures. “At CREDAI, we view this continuity as constructive for real estate, where predictability in financing costs is essential for sustaining demand and investment sentiment,” he adds.
According to Ramani Sastri - Chairman & MD, Sterling Developers, the decision to maintain status quo will keep the ongoing residential real estate sales momentum on course, offering homebuyers assurance of steady loan terms.
The Indian real estate sector has demonstrated exceptional resilience and momentum, driven by robust demand, rising aspirations, and supportive government-led initiatives, positioning it as one of the most dynamic and fastest-growing markets globally. As India's economy continues to grow, there is an increasing interest among the homebuyers to continue to invest in residential real estate for long-term returns, he says.
“We are hopeful that the real estate sector’s growth momentum will continue to accelerate further and drive long term momentum for home ownership and contribute positively to overall economic expansion. A supportive interest-rate environment plays a crucial role in sustaining homebuyer confidence and hence, we would definitely welcome further rate cuts in the near term, thereby boosting affordability and further investments in the sector,” says Sastri.