RBI Policy Review: Realty Sector Bets On Rate Pause, Seeks Stability Over Cuts

As the Reserve Bank of India (RBI) gears up to announce its monetary policy this week, homebuyers, developers and the broader real estate industry are watching closely - not because they expect a rate cut, but because they want stability. Most industry experts believe the Monetary Policy Committee (MPC) will keep the repo rate unchanged at 5.25 per cent, arguing that predictable borrowing costs are just as important as lower interest rates in the current environment.

While an unchanged rate is expected to support buyer confidence and project planning, developers and industry experts say a future rate cut will be crucial to revive demand in the affordable housing segment, where higher borrowing costs continue to weigh on homebuyers.

Says Anuj Puri, chairman, Anarock Group: “From the upcoming monetary policy, the real estate sector anticipates the benchmark repo rate will remain unchanged at 5.25 per cent. A rate cut would certainly go a considerable way in directly stimulating homebuyer sentiment; however, we expect the central bank to remain cautious given sticky inflation and ongoing global volatility. It is nevertheless true that the sector is at a critical juncture.”

Anarock’s Q2 2026 data reveals a 6 per cent year-on-year (y-o-y) decline in housing sales across the top seven cities, dropping to 90,715 units. Most notably, the affordable housing segment continues to shrink, now comprising just 6 per cent of the total new supply. Extended elevated borrowing costs have a severe impact on price-sensitive homebuyers, dampening demand in this crucial category.

Adds Puri: “Maintaining the status quo on the repo rate does provide predictability for project financing, but it does not alleviate these affordability challenges. As we approach the festive season, we certainly look forward to a future pivot toward rate easing, as this would revitalize overall sales volumes - particularly for affordable homes.”

With growth and macroeconomic stability being the top priorities of the MPC, real estate consultants anticipate that the interest rate will be kept unchanged.

Says Shishir Baijal, international partner, chairman and managing director, Knight Frank India: “Another cut in repo rate would have certainly made housing more affordable and given a boost to buyers’ sentiment, which will help sales in the mid-income and affordable housing segment. However, policy stability is also important for the market right now.”

Employment generation, which is driving high residential demand in today’s market, alongside rising household income levels, urbanisation and improving consumer confidence, makes the economy less dependent on interest rate cuts. Further, stability in interest rates will allow developers to plan their business better and continue investing in the sector.

Adds Baijal: “Going forward, we hope the MPC maintains a calibrated approach by containing inflation while ensuring a conducive monetary policy for long-term growth, which will boost investments and enable the real estate sector to flourish on a sustainable basis.”

Manik Malik, CEO & president, BPTP, says that India’s homebuyers as well as the real estate sector will be keeping a close tab on the forthcoming RBI policy meet. Housing demand has held strong despite global volatility, on account of healthy end-user demand, robust absorption and consistent investment towards infrastructure.

“Stability in interest rates will provide further confidence to buyers, improve affordability, and help the sector stay on its growth path. Amidst consistent structural demand in India’s top cities, stable policies will continue to aid growth of the real estate sector in the long term,” he says.

Deepak Sangwan, chairman of Origen Realty, says, “We believe that the RBI is most likely to keep the repo rate unchanged because stable interest rates fuel affordability among homebuyers and allow them to make long-term purchase plans. In addition, it allows real estate developers more surety while executing projects as well as invest in the upcoming projects. Housing demand is stable and underpinned by infrastructure development and accelerated urbanization. So, a hold on the current rate cycle will reinforce the positive sentiment in the sector, strengthen buyer confidence and aid economic growth.”

This year has seen Delhi-National Capital Region (Delhi-NCR) markets relatively busier compared to other metros with areas, such as Dwarka Expressway, Golf Course Extension Road, New Gurugram (to an extent) seeing a lot of activity and Sohna slowly heating up as well.

“Loan rates remaining range-bound are one of the major reasons for that. Now if the RBI doesn’t change the repo rate this week, buyers in NCR will have no reason to re-plan their budgets or postpone purchase plans. People in NCR tend to get impacted by rate hikes/lows faster than most other markets do and, therefore, even a status quo from the RBI will benefit sentiment in this market. Builders are expecting the same and are launching a lot of festive projects in NCR. For now, NCR just wants stability and nothing more,” says Pushpender Singh, managing director, JMS Group.

Some developers say that people mostly think about home loan buyers when repo rate news comes up. But there's another aspect to this, which is construction finance or land loans that developers engage with on day-to-day basis.

Says Adil Altaf, CEO, ANHAD Developers: “Constant repo rate favours that segment as well. Builders can plan their launches and construction activities accordingly without having to estimate additional costs in between projects. It might not be something that drives headline news, but it ensures that entire chain from land, construction, and sales doesn't come to a grinding halt. Now the industry isn't expecting a rate cut. Just constant rates will do the job.”