The Reserve Bank of India’s decision to keep the repo rate unchanged at 5.25 per cent was welcomed by real estate developers and consultants, who said policy stability would help sustain housing demand and support project execution even as rising costs, geopolitical tensions, and inflationary pressures pose challenges.
Industry executives said the Monetary Policy Committee’s (MPC) decision provides predictability to homebuyers and developers at a time when global uncertainties are affecting input costs and investor sentiment.
Sanjay Dutt, managing director and chief executive officer of Tata Realty and Infrastructure, said, “Stable borrowing costs will continue to support housing demand, particularly in key urban centres where aspirations for homeownership remain strong.”
"The RBI's decision to maintain the status quo on rates is a key anchor for the residential real estate market. Stable borrowing costs ensure that the market is not simultaneously burdened by higher material costs and rising loan rates," said Anuj Puri, chairman of Anarock Group.
Puri added that geopolitical tensions in the Middle East have pushed up global oil prices and construction costs, while also prompting some overseas investors to delay residential investments in India.
Through their Q4 FY26 earnings commentary, the top Indian developers have already hinted at a 2-5 per cent increase in construction costs due to the West Asia conflict, with a limited but manageable impact on margins.
The policy decision comes at a time when housing supply is outpacing sales. Anarock data showed that sales declined by 4.43 per cent year-on-year (Y-o-Y) to 404,005 units in FY26, while new supply stood at 445,405 units, up almost 11 per cent Y-o-Y. Available inventory also increased by 7.4 per cent Y-o-Y to 601,210 units.
Industry experts said a stable financing environment will be critical to absorbing the growing inventory.
Lata Pillai, senior managing director and head of capital markets at JLL India, said the central bank had sought to balance growth concerns with emerging inflationary risks arising from elevated energy prices and the prospect of a weak monsoon.
"While inflationary pressures are likely to rise, inflation remains within the target band. The status quo on interest rates is positive for the real estate market, with certainty on lending rates for both developers and homebuyers expected to keep stakeholders relatively unfazed," Pillai said.
She cautioned, however, that higher construction costs could eventually be passed on to buyers, potentially affecting affordability, particularly in the mid-income housing segment, even as the share of affordable housing continues to shrink.
Developers said the unchanged rate environment would support long-term investment decisions and maintain momentum across both residential and commercial real estate.
Navin Makhija, managing director of The Wadhwa Group, said stable borrowing costs encourage home purchases and facilitate disciplined capital allocation across the real estate value chain.
"While elevated energy prices and geopolitical developments warrant caution, the underlying fundamentals of Indian real estate remain strong," Makhija said, adding that demand for premium housing in Mumbai continues to be supported by infrastructure development and rising incomes.
Commercial real estate stakeholders also viewed the policy decision positively.
Manas Mehrotra, founder of flexible workspace operator 315Work Avenue, said stable interest rates would support leasing activity and long-term investment decisions. "As businesses increasingly adopt agile and cost-efficient workspace strategies, a supportive policy framework will further accelerate expansion plans and strengthen India's evolving commercial real estate ecosystem," he said.
Consultants said the RBI's decision reflects confidence in the resilience of the domestic economy despite external headwinds.
Shishir Baijal, chairman and managing director of Knight Frank India, said the central bank had adopted a calibrated approach amid geopolitical uncertainty and pressure on the rupee.
"For the real estate sector, the decision provides much-needed stability and predictability. Stable borrowing costs are particularly important for sustaining residential demand, where affordability remains a key consideration," Baijal said.
“India’s commercial real estate market continues to benefit from strong occupier demand from global capability centres (GCCs), multinational corporations, and technology firms, supported by the country’s growing economic prominence, improving infrastructure, and deep talent pool,” Dutt added.
Developers also expect the pause to aid execution and investor confidence.
Pratik Tibrewala, senior vice-president and head of corporate finance at M3M India, said stable rates would keep home loan costs manageable, support project execution, and reinforce real estate's appeal as a long-term asset class.
 "RBI's rate pause seen supporting housing demand, project execution")
