RBI's decision to pause repo rates at 5.5% will help maintain home loan EMIs: Real estate experts

The industry expects 50 basis points cut in repo rate in the current fiscal

Bengaluru: The real estate industry has expressed mixed feelings about the Reserve Bank of India’s (RBI) decision to keep the repo rate unchanged at 5.5% stating that it will help maintain home loan EMIs at current levels, which helps sustain buyer sentiment.

However, the industry feels that it does not help improve housing affordability. This stability means existing home loan borrowers won't see any immediate EMI changes, while new borrowers will find loan interest rates holding steady, said Anuj Puri, Chairman, ANAROCK Group.

As per latest ANAROCK data, Q3 2025 residential sales in India's top 7 cities dropped 9% year-on-year to 97,080 units, yet overall sales value jumped 14% to Rs 1.52 lakh crore, indicating demand shifted towards premium and mid-segment homes.

The real estate industry was expecting a 25 basis points reduction in this meeting. The sector is hopeful that the RBI will deliver a calibrated 50 basis points cut during the current financial year, in two tranches, subject to conditions.

The Confederation of Real Estate Developers’ Associations of India (CREDAI) has welcomed the Reserve Bank of India’s decision to maintain the policy repo rate at 5.50%, a move that provides the housing sector with much-needed stability in a period of global economic uncertainty.

“Stable rates are critical for homebuyers, who benefit from steady borrowing costs and gain confidence in long-term planning, while developers are assured of predictability in financing and investments,” CREDAI said.

The recent rationalisation of GST has also lifted sentiment and boosted demand across sectors, reinforcing the overall growth cycle. With gold and equity markets continuing to remain volatile, housing stands out as a safer and more dependable long-term investment for Indian families.

CREDAI emphasises that it is now crucial for banks and housing finance companies to swiftly pass on the benefits of the current policy stance to both new and existing borrowers. Timely transmission will ensure that housing demand remains strong, especially during the ongoing festive season.

With GST on cement reduced from 28% to 18%, construction costs are expected to fall by 3-5%, potentially reducing home prices by 1-1.5% for buyers. This reduction could save homebuyers Rs 1-3 lakh on purchases, particularly benefiting affordable and mid-segment housing where cost sensitivity is high. ANAROCK data shows that affordable housing's share has declined from 38% in 2019 to just 18% in 2024, making these GST cuts crucial for reversing this trend. The combination of stable interest rates and lower construction costs creates a favorable environment for housing demand, especially during the ongoing festive season.

Jash Panchamia, Executive Director, Jaypee Infratech Limited, said the unchanged repo rates reflects a steady and supportive approach to maintaining economic stability, with inflation under control. Following earlier reductions, the current stance provides stability to the housing market, allowing homebuyers and long-term investors to plan confidently. The positive sentiment from the festive season, combined with the transmission of previous rate cuts, is helping maintain strong buyer interest.

“For developers, consistent interest rates allow for careful planning and execution of projects. Coupled with attractive offerings and well-designed homes, demand remains robust across segments”, he said.

Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation, said RBI’s decision to maintain the repo rate at 5.50% reflects a cautious and prudent approach to balancing the twin objectives of economic growth and inflation management. “While a rate cut at this juncture would have provided an additional boost to housing demand and overall market activity, the real estate sector continues to benefit from earlier reductions and existing lending rate adjustments by commercial banks,” he said.

Welcoming the RBI’s decision, Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd said it brings stability and continuity to India’s financial ecosystem amid global uncertainties. The move is expected to sustain positive momentum across sectors, including real estate, by supporting liquidity, boosting consumer confidence, and encouraging investment activity. 

Looking ahead, the status quo is set to ensure a stable and balanced growth trajectory for the real estate ecosystem, benefiting developers, buyers, and allied sectors alike, he said.