RBI Holds Repo Rate at 5.25 pc

RBI policy stability boosts real estate sentiment

Mumbai: The Reserve Bank of India’s (RBI) decision to keep the repo rate unchanged at 5.25% has been widely welcomed by stakeholders across the real estate sector, who view the move as a stabilising factor at a time when India’s growth outlook has strengthened following the Union Budget’s emphasis on infrastructure spending and improving external trade prospects. Industry leaders believe that policy continuity will help sustain housing demand, reinforce investment sentiment and provide greater visibility on borrowing costs, even as inflationary pressures remain under close watch.

The central bank’s steady stance comes against the backdrop of accelerating infrastructure-led development and expectations of stronger economic growth. Developers and consultants said the unchanged rate environment is likely to support project execution, maintain consumer confidence and enhance predictability in financing decisions across residential and commercial segments.

Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, said, “The RBI’s decision to hold rates steady, reflects a cautious and stability focused stance in a volatile global environment. As the economic growth outlook remains stable and maintain momentum, we can expect this overall growth to have a positive impact on the real estate sector. The pause underscores the central bank’s priority on managing currency pressures and external risks.”

He added that while further rate cuts could have provided an additional boost to homebuyer sentiment, particularly in affordable housing, banks are expected to pass on more of the existing rate benefits to consumers. He also welcomed the easing of lending norms for REITs, stating, “RBI’s decision to permit bank lending to REITs is a welcome step for the sector’s evolving funding ecosystem… The move reinforces regulatory confidence in listed real estate vehicles and should strengthen liquidity and depth in India’s real estate investment market.”

Echoing similar sentiments, Prashant Sharma, President, NAREDCO Maharashtra, said, “The RBI’s decision to maintain the repo rate at 5.25% provides much-needed stability to the real estate sector at a time when growth expectations have strengthened following the Union Budget’s thrust on higher government spending and improving external trade prospects after recent trade agreements.” He added that policy continuity would help sustain housing demand and enable developers to plan investments with greater confidence.

Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory, said, “The RBI’s status quo on interest rates comes at an opportune time, as the Union Budget’s increased government spending and improving trade outlook have lifted expectations of faster economic growth.” According to him, stable interest rates will play a crucial role in sustaining homebuyer sentiment and investment activity, reinforcing real estate’s appeal as a long-term asset class.

Kamlesh Thakur, Co-Founder and Managing Director, Srishti Group, noted, “The RBI’s decision to maintain status quo on interest rates reflects a well-calibrated approach to balancing inflation control with economic momentum.” He added that stable financing costs and an improved GDP outlook are encouraging for urban housing demand, particularly in infrastructure-driven corridors.

Shilpin Tater, Managing Director, Superb Realty, said, “The RBI’s neutral stance and steady repo rate of 5.25% reinforce confidence across the real estate ecosystem,” adding that continued government-led capital expenditure is expected to keep demand for quality commercial and residential assets resilient.

Shraddha Kedia-Agarwal, Director, Transcon Developers, said, “The decision to maintain status quo on policy rates is reassuring for both homebuyers and developers,” noting that stable borrowing costs and an improved growth outlook would help sustain residential demand, particularly in metropolitan markets.

Dhruman Shah, Promoter, Ariha Group, observed, “The RBI’s decision to keep the repo rate unchanged at 5.25% reflects confidence in the Indian economy’s underlying strength and a pragmatic approach to sustaining growth,” highlighting sustained buyer confidence and healthy sales momentum in urban markets.

Nihar Jayesh Thakkar, Founder, The Mandate House Pvt. Ltd., added, “The RBI’s steady policy stance underscores a careful calibration between growth support and inflation management,” stating that improved macro visibility and infrastructure spending are likely to boost commercial and investment-driven real estate transactions over the medium term.

Industry stakeholders believe that while inflation risks remain a key monitorable factor for policymakers, the current policy continuity provides a stable platform for sustained growth in India’s real estate sector, supported by infrastructure expansion, fiscal stimulus and improving economic fundamentals.

“RBI’s decision to permit bank lending to REITs is a welcome step for the sector’s evolving funding ecosystem. Indian REITs, with approximately USD 27 bn of AUM across office and retail segments, have historically relied on capital market issuances and sponsor-backed financing, and access to bank credit will serve as an additional funding avenue that diversifies the liability stack and enhances refinancing flexibility. The move reinforces regulatory confidence in listed real estate vehicles and should strengthen liquidity and depth in India’s real estate investment market.”

Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India