RBI’s announcement to keep repo rate unchanged positively impacts homebuyers’ sentiment as loans remain affordable and demand for houses is expected to stay consistent.
Homebuyers and developers have heaved a sigh of relief as RBI did not change the repo rate in its latest monetary policy review meeting. Industry stakeholders have reacted positively to the RBI’s decision to pause the interest rate hike as they expect it to support residential property sales which have started to feel the heat of high input costs and global economic headwinds.
With the repo rate remaining unchanged, industry experts are of the view that it will support absorption of inventory and lead to launches of new projects, thereby sustaining the growth story of Indian real estate industry through 2026.
RBI Status Quo On Rates Strengthens Homebuyer Confidence and Realty Growth
With the RBI keeping the repo rate unchanged in its June policy review, industry experts expect sustained housing demand, affordable home loans, and stronger buyer sentiment despite rising construction costs and global economic uncertainties.
As widely expected, the Reserve Bank of India (RBI) kept the repo rate unchanged in its June 2026 Monetary Policy Committee (MPC) meeting on Friday, while taking note of possible inflationary impact due to prolonged West Asia crisis and its impact on various supply chains.
Hailing the MPC decision to maintain status quo on the repo rate, industry experts said it is a welcome development for India’s residential real estate. Strong yearly growth rates continue for Indian housing despite short-term geopolitical shocks, and this pause will support the industry as it deals with increasing consumer pressures and volatile construction economics.
Escalating geo-political tensions overseas continue to challenge India’s macroeconomic stability in the first quarter of 2026. Higher crude oil prices in the international markets due to the war in the Middle East and rising input costs at home are directly impacting the economics of construction.
“For one, developers are facing pressure from rising inflation at the input-side. Secondly, many investors from the Middle East - a large source of capital for India’s housing market - are sitting on the sidelines due to elevated geopolitical uncertainty. Neither of these factors affect the housing market, thanks to stable borrowing costs. If RBI were to raise lending rates, higher material costs would be compounded by more expensive loan rates,” said Anuj Puri, Chairman, ANAROCK Group.
Quarter-on-quarter (QoQ) performance dipped marginally as per the data shared by ANAROCK Research. Total residential sales fell by 7 per cent QoQ with around 1,01,675 units sold during Q1 2026 as compared to 1,08,970 units in Q4 2025. Likewise, total value of sales dropped by 5 per cent QoQ to Rs 1.51 lakh crore. However, keeping in mind that Q1 2026 numbers are being compared to the soft market of Q1 2025, annual performances are holding strong. Sales volume and sales value in Q1 2026 grew by 9 per cent and 6 per cent, respectively, as compared to Q1 2025 which saw sales of 93,280 units worth Rs 1.42 lakh crore.
New launches have now decisively overtaken sales velocity, ending the trend seen after the pandemic. Total new supply was up 2 per cent sequentially and 26 per cent YoY as more than 1,26,265 units were launched in Q1 2026. Consequently, the total unsold inventory available rose by 4 per cent QoQ and 7 per cent YoY to surpass 6.01 lakh units at the end of Q1 2026. Rising inventory levels need support from a stable and affordable lending market to be absorbed.
“The MPC keeping key interest rates unchanged acts as this support. Input costs are increasing and will need to be managed, but overall demand from Indian housing consumers remains strong. Thanks to the RBI keeping repo rates unchanged, home loan products stay competitive and can help the industry absorb higher inventory while maintaining its growth through the year,” said Puri.
The RBI decision to keep all policy rates unchanged indicates that the central bank is satisfied with the current state of the economy and it can well balance the act between growth and price stability.
“This is good news for the housing sector as home loan rates will remain at historical lows of around 7–7.25 per cent. This will bring comfort to all those servicing home loans at lower rates as compared to hikes witnessed during 2022–24 as well as those who are planning to buy a house soon. Further, with stable interest rates, strengthening housing demand and improving infrastructure spending, housing activity will receive a boost. Better sentiments for consumers as well as businesses were the need of the hour and RBI has certainly delivered,” said Raoul Kapoor, Co-CEO, Andromeda Sales and Distribution Pvt Ltd.
Developers said the RBI's decision to keep the repo rate unchanged is surely a booster shot for sentiment in the realty sector and among homebuyers.
Shekhar G Patel, President, CREDAI, said this steady approach by RBI will be beneficial for the real estate sector as well as enable markets to sustain their positive momentum going forward. Global growth forecast has also been retained, suggesting that RBI is bullish on India’s domestic growth story even with global headwinds.
“Revised GDP growth estimate at 6.6 per cent reflects healthy growth expectations for the Indian economy. With home loans rates remaining unchanged, we expect housing demand to remain strong, especially from mid-income and top-end housing segment consumers. By adopting a wait-and-watch approach on inflation, RBI is seeking to bolster growth while keeping a close eye on inflation expectations. RBI’s pledge to remain accommodative for as long as necessary to sustain growth should also extend to the affordable housing sector to help bridge housing shortage,” Patel added.
“The stability in interest rates will further facilitate easy loans for home buyers, thereby increasing their demand. This move will also encourage developers to accelerate launches and completion rates, augmenting a positive atmosphere of growth and confidence in various housing markets. We hope the RBI keeps up the pragmatic approach towards realty industry,” said Jitender Yadav, Director, Roots Developers.
Abhay Mishra, CEO & President, Jindal Realty, said, “Keeping the repo rate unchanged gives the real estate sector continuity at a very important time. It will bring a sense of relief to homebuyers as it will help maintain the affordability of housing by keeping borrowing costs under control. It will also allow the industry to preserve the demand momentum we have seen so far.”
Moreover, it will enable developers to plan their business moves keeping in mind a stable rate scenario. “In the coming time, we expect the policy measures to focus on providing continued support and liquidity to help realise the sector’ utmost potential and drive stable and inclusive growth in all markets,” added Mishra.
For the realty industry, not just reduction in rates but even stability in interest rates helps boost the sentiment by infusing confidence among buyers.
“Repayment capability can be planned better by the buyers in a stable interest rate regime and they can plan their purchases ahead. Developers will be able to better plan their executions and projects can be delivered in a timely manner when there is certainty in the borrowing cost. We believe that the ongoing stability in interest rate regime will help sustain demand for housing, especially in the mid-income and premium segment which will aid the growth of the realty sector,” said Ashish Bhutani, Managing Director, Bhutani Infra Ltd.
Akash Pharande, Managing Director, Pharande Spaces, said, “With home loan rates being stable, EMI amount would remain unchanged in terms of rate as well as amount payable every month, thereby allowing the consumers to confidently commit for a longer period. Buyer sentiment being the only variable affecting the demand equation for houses, this will help in keeping the sentiment positive and will propel sales further in emerging markets such as Pune and PCMC which have a demand that is led by infrastructure.”
Shiv Garg, Director, Forteasia Realty Pvt Ltd, said, “Cost of borrowing directly impacts the affordability of housing which in turn influences the fence-sitters to go ahead with their home purchase decision. This directly impacts the first-time home buyers the most as they are the most sensitive to home loan costs.”