Despite a marginal increase in borrowing costs, developers remain positive on NCR housing demand, citing strong end-user sentiment, robust infrastructure growth and improving sector fundamentals
The Reserve Bank of India’s Monetary Policy Committee (MPC) has raised the repo rate by 25 basis points to 5.50% from 5.25%, marking the first increase since February 2023. While the move signals a calibrated response to evolving economic conditions, real estate developers across the National Capital Region (NCR) believe the increase is unlikely to materially disrupt the housing market, particularly during the crucial festive homebuying season.
Industry stakeholders view the 25 bps adjustment as a measured move, with the impact on homebuyers expected to remain manageable. With the increase being relatively modest, the resultant impact on home-loan EMIs is likely to be limited, particularly for buyers with strong credit profiles and those purchasing homes within their affordability range. Importantly, the underlying drivers of residential demand-including rising incomes, urbanisation, improving connectivity and a strong preference for quality housing-remain firmly intact.
The NCR residential market has demonstrated considerable resilience over the past few years, supported by sustained end-user demand and improving consumer confidence. Developers believe the current rate environment, despite the marginal increase, continues to provide a conducive backdrop for genuine homebuyers. The festive period around Navratri, Dussehra and Diwali is traditionally one of the strongest periods for residential sales, and stable economic fundamentals coupled with attractive developer offerings could help sustain buyer momentum.
For homebuyers, the 25 bps increase should not be viewed as a significant affordability barrier. The marginal rise in borrowing costs is unlikely to outweigh the long-term benefits of homeownership, particularly in established and emerging NCR growth corridors. Moreover, developers are expected to continue offering attractive festive schemes, flexible payment plans and customer-centric propositions, which can help offset the incremental impact of financing costs.
The outlook for Gurugram remains particularly encouraging. Established and emerging residential micro-markets such as Golf Course Road, Dwarka Expressway, Golf Course Extension Road (GCER), Southern Peripheral Road (SPR), New Gurugram and Sohna Road continue to attract homebuyers on the back of improving connectivity and infrastructure. Developments such as the Delhi-Gurugram-Jaipur Expressway, Dwarka Expressway, Sohna Elevated Road, proximity to IGI Airport, the Delhi-Mumbai Industrial Corridor (DMIC) and upcoming Namo Bharat connectivity are strengthening the long-term investment and liveability proposition of these corridors.
Rishe Singh, Founder and CEO, Silverdome Realtors said “25 basis point hike taking the repo rate to 5.50% will add a little pressure on financing costs in the short term, and some buyers may pause to recalculate their budgets. But I don't see it changing the bigger picture for Indian real estate. People still want homes of their own, incomes are rising, and more families are choosing organised developments they can trust. Those with a genuine need to buy, especially in well-connected, established micro-markets, will keep moving ahead. If anything, a moment like this reminds all of us to plan our finances carefully, and that makes the sector stronger over time."
Rishabh Periwal, Sr. Vice President, Pioneer Urban Land and Infrastructure Ltd . says, “The 25 bps repo rate hike is a calibrated move, and we expect its impact on real estate to remain contained. In gurugram, the luxury residential segment continues to see strong demand from affluent buyers and senior professionals who prioritise space, design, and lifestyle over marginal changes in EMIs. The commercial segment stands equally resilient, with growing demand from GCCs and a steady appetite for premium workspaces along key corridors. Backed by robust infrastructure and connectivity, Gurugram remains one of the most dynamic markets in the country. We remain optimistic about demand across both segments in the quarters ahead."
Varun Garg, Director, Karyan Group says, "The 25 bps repo rate hike is a measured step, and we expect its impact on residential real estate to be limited. Markets like Noida and Ghaziabad are emerging as strong growth corridors, with improving metro connectivity, expressway access, and better social infrastructure drawing both end-users and investors. Homebuyers are choosing these markets for their affordability, larger homes and long-term appreciation potential, and a marginal rise in EMIs is unlikely to change the intent. The wider NCR continues to offer compelling residential opportunities. We remain confident that housing demand will stay resilient in the coming quarters."
Rajan Yadav, Director, Roots Developers says, "Given the uncertain global economic environment, the RBI's October policy announcement has increased the repo rate by 25 bps, to 5.50%. The rate hike will unlikely derail real estate demand, particularly in Gurugram, where growth is backed by strong infrastructure, corporate presence, and end-user confidence. Segments like plotted development continue to attract buyers seeking long-term value and flexibility, while high-end projects with premium amenities are seeing sustained interest from affluent homebuyers less sensitive to marginal EMI changes. Gurugram’s established social infrastructure and connectivity further strengthen its appeal."
Yashank Wason, Managing Director, Royal Green Realty says, "The real estate industry is expected to be somewhat impacted by the RBI's 25 basis point increase in repo rates, which raised the policy rate to 5.50%. For homebuyers with floating-rate loans, rising borrowing costs might slightly raise EMIs, but for those with steady incomes and lengthy investment horizons, the effect should be tolerable. Depending on the current lending rate, a 25 basis point rise on a ₹50 lakh, 20-year home loan could result in a slight increase in EMI. Given India's robust underlying housing demand, urbanization, and 7.8% GDP growth in the first quarter of FY27, we think the industry is still robust and fundamentally sound."
The current policy environment also reinforces the importance of purchasing based on long-term affordability and genuine housing requirements rather than short-term interest-rate movements. For buyers who have already planned their purchase, the festive season can remain an attractive window to evaluate projects, compare offerings and benefit from developer-led incentives. Overall, the modest increase in the repo rate is unlikely to overshadow the larger positive story unfolding in NCR real estate. With developers maintaining a strong focus on execution, quality and customer affordability, and buyers continuing to prioritise homeownership, the sector remains optimistic about sustaining healthy residential demand in the months ahead.
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