RBI holds repo rate: Housing market eyes stronger festive housing demand

The Reserve Bank of India decided to maintain its benchmark repo rate at 5.25%, which has been well received by real estate leaders in India. They believe this move will help maintain buyer confidence and support housing demand before the festive season. Speaking at the bank's monetary policy announcement on Wednesday, the central bank maintained its neutral stance due to concerns over inflation trajectory influenced by factors such as the southwest monsoon, El Nino, geopolitical tensions, and global trade policies.

Industry stakeholders welcomed the decision, with SECBRE's Anshuman Magazine stating that stable borrowing costs would be crucial for the residential market heading into the festive season. He added that predictable borrowing costs would allow developers to plan for festive-season project launches and give buyers more confidence.

According to Parveen Jain, president of NAREDCO, the unchanged repo rate would benefit not just housing but also construction activity, construction-linked industries, and millions of associated workers. She added that the decision would have a positive impact on the sales of under-construction properties during the festive season.

International Partner and Chairman and Managing Director of Knight Frank India, Shishir Baijal, said the policy decision would help sustain momentum in both residential and commercial real estate. For the real estate sector, this policy stability is expected to support housing demand, investment activity, and the sector's long-term growth trajectory.

Shekhar Patel, President of CREDAI, echoed similar views, stating that policy consistency would bolster confidence among stakeholders making long-term investment and homeownership decisions. Patel concluded by saying that continued investment in infrastructure, coupled with stronger policy support for affordable housing, would further strengthen the sector's growth trajectory.