The Reserve Bank of India (RBI) has kept the repo rate unchanged at 5.5%, ending a cycle of three consecutive rate cuts earlier this year that cumulatively reduced borrowing costs by 100 basis points since February. The Monetary Policy Committee (MPC) maintained its neutral stance, balancing economic growth prospects against inflationary risks amid global headwinds, including U.S. trade measures and geopolitical tensions.
The pause in rate changes signals a focus on consolidating the benefits of earlier cuts while monitoring key economic indicators. For home loan borrowers, the status quo means no further immediate reduction in EMIs, but also no risk of higher borrowing costs in the short term. Floating-rate borrowers continue to benefit from the earlier cuts, with prevailing home loan rates in the 7.3%–8% range. The possibility of future reductions remains open, contingent on inflation and growth data.
Market Reactions from the Real Estate Sector
The decision has drawn broad approval from real estate developers, who view rate stability as critical to sustaining demand and investment momentum.
Mr. Abhay Kumar Mishra, President & CEO, Jindal Realty, said, “RBI’s decision to keep the repo rate unchanged at 5.50% is a welcome move for the real estate sector. Following the significant rate cuts earlier this year, this pause allows the benefits of those reductions to fully pass on to homebuyers. This stability provides a predictable environment, which is crucial for consumer confidence and investment planning. Home loan interest rates are likely to remain stable, encouraging continued demand. We anticipate this will sustain the positive momentum in the housing market, supporting both prospective buyers and developers.”
Mr. Rohit Kishore, CEO, Hero Realty, stated, "The RBI’s decision to keep the repo rate unchanged at 5.5% is a steady and reassuring move for the real estate sector. Stable borrowing costs will benefit both homebuyers and developers. For buyers, it means continued lower EMIs and easier access to home loans, which can encourage more people to buy homes. For developers, the sustained interest rates will help manage costs and finish projects on time. This policy continuity will boost confidence in the market and maintain demand for homes and office spaces. We expect the luxury housing segment to stay strong, especially in metro cities. Lower EMIs and better loan offers will make people more confident to buy."
Impact on Housing Demand and Financing
Stable policy rates are seen as a cornerstone for maintaining affordability and predictability in the housing market. Developers point to the benefits of consistent financing conditions in planning and executing projects without uncertainty over interest costs.
Mr. Adil Altaf, Managing Director, Trinity, noted, "The proposed hike in circle rates, while initially challenging, marks a step toward aligning with actual market dynamics. For micro-markets like Dwarka Expressway, SPR, and Golf Course Road, this recalibration can enhance transparency, reduce underreporting, and boost investor confidence. While short-term sentiment may dip, long-term impact is largely positive—bringing Gurgaon closer to mature global realty practices. Premium corridors with robust infrastructure and livability will continue attracting serious buyers and end-users, helping developers with quality offerings to thrive in a more transparent, compliant ecosystem."
Mr. Raghav Malhotra, Founder and Director of PRIME Developments, said, “The real estate sector is hopeful with the RBI’s August 2025 repo rate decision on keeping the rates unchanged at 5.50%. It will provide confidence in home loan EMIs, enhancing affordability for first-time buyers and fueling festive season demand. This would drive project launches and completions, aligning with heightened Diwali demand. Given a stable inflation and GDP, and a stable repo rate, consumer confidence remains positive with better clarity in the housing finance ecosystem, along with heightened festive buying, and sustained market growth.”
Confidence Across Market Segments
The policy decision comes alongside easing retail inflation, which reached a six-year low of 2.1%, and steady GDP growth of 7.4%. Developers see these conditions as favourable for both mass-market and premium housing.
Mr.Yashank Wason, Managing Director, Royal Green Realty, remarked, “The Reserve Bank of India’s decision to keep the repo rate steady at 5.5%—following a cumulative cut of 100 basis points earlier this year—offers a strong signal of stability to the real estate sector. By ensuring predictable borrowing costs, this move bolsters consumer confidence, particularly among home loan borrowers who have already gained from earlier rate reductions. With retail inflation easing to a six-year low of 2.1% and GDP growth holding strong at 7.4%, the RBI’s pause reflects confidence in India’s economic fundamentals. This stable interest rate environment is expected to sustain property demand, creating favourable conditions for both buyers and developers.”
Mr. Sudeep Bhatt, Director Strategy, Whiteland Corporation, added, “The RBI’s decision to maintain the repo rate at 5.50% is a strong positive for the Delhi NCR housing market. We've seen steady growth following previous rate cuts this year. For homebuyers, it ensures a stable interest rate environment, boosting confidence. For developers, the pause allows focused project planning and execution without concerns over rising borrowing costs, supporting a robust pipeline for new launches. This will help sustain demand momentum. It’s a clear signal of continued housing sector growth and we expect sentiment across the region to remain optimistic.”
Mr. Mohit Agarwal, Business Head, Conscient Infrastructure Pvt. Ltd, commented, “The RBI’s decision to keep the repo rate unchanged at 5.5% reflects a cautious and balanced approach toward sustaining economic stability. Continued lower borrowing costs will help preserve affordability for luxury homebuyers and investors, thereby sustaining demand in high-end residential markets. This unchanged stance, coupled with the MPC’s neutral outlook, reinforces confidence among HNIs and NRIs to make strategic real estate investments. As a developer, we continue to benefit from predictable financing costs, enabling steady project execution. We anticipate sustained momentum in the luxury housing sector, especially in metro cities, as stable EMIs and attractive financing options continue to drive buyer confidence.”
Mr. Gaurav K Singh, Chairman and Founder, Womeki Group, stated, “The RBI’s decision to maintain the repo rate at its current level reflects a balanced and cautious approach to sustaining economic growth while keeping inflation in check. For the real estate sector, especially the affordable and mid-segment housing markets, this stability in lending rates is crucial. It encourages homebuyers to make purchase decisions and gives developers like us the confidence to plan long-term projects with clarity. At Womeki, we view this as a positive signal for sustained momentum in housing demand in the coming quarters.”
Outlook
The RBI’s stance provides a platform for steady growth in the property market, particularly during the upcoming festive season when demand typically rises. However, high property prices and external economic uncertainties could still weigh on sentiment. Developers may need to offer flexible payment options to maintain transaction volumes. With inflation projected at 3.1% for FY26, analysts see room for further monetary easing later in the year, which could provide additional stimulus to housing demand. In effect, the RBI’s decision maintains the trajectory of stability in India’s real estate sector—keeping EMIs predictable for borrowers, supporting developers in project planning, and reinforcing market confidence.
