The Reserve Bank of India’s Monetary Policy Committee (MPC) on October 1 left the repo rate unchanged at 5.5 percent, a move widely seen as balancing growth imperatives with inflation management while reinforcing confidence in the economy during the festival season.
The decision, coming after a cumulative 100 basis points cut earlier this year, would support consumer sentiment, give predictability to developers and ensure housing demand sustains momentum, market observers said.
“Along with the recent GST cuts and range-bound inflation, the announcement is likely to lift consumer sentiment and may encourage greater demand across key sectors in the coming weeks. In real estate, it signals a steady growth outlook and reinforces market confidence, offering long-term predictability to developers and homebuyers,” said Anshuman Magazine, chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE.
The policy pause effectively creates a supportive ecosystem for housing — GST cuts are cushioning affordability, festive sentiment is nudging fence sitters to buy and steady interest rates are ensuring predictable EMIs.
The decision sends a clear signal of stability to consumers and developers alike. The decision to hold the repo rate at 5.5 percent reflects a measured approach during festival season and amid volatile global macroeconomic and policy conditions, Magazine said. He expects consumption to improve and market momentum to accelerate further.
The RBI's decision to hold repo rate along with GST cuts will provide impetus to the consumption and help shield India’s growth from tariffs, said Ankur Jalan, CEO, Golden Growth Fund (GGF), a category II Real Estate focused Alternative Investment Fund (AIF).
Follow our live blog for the latest on RBI policy decisions
Festive boost meets affordability
Anuj Puri, chairman, Anarock Group, said RBI's decision means existing borrowers will not see any immediate EMI changes, while new borrowers will find loan interest rates steady.
According to latest Anarock data, Q3 2025 residential sales in India's top 7 cities dropped 9 percent year-on-year to 97,080 units, yet overall sales value jumped 14 percent to Rs 1.52 lakh crore, indicating demand shifted towards premium and mid-segment homes.
But luxury-housing sales jumped 85 percent YoY in the first half of 2025, nearing 7,000 units across major cities, CBRE-Assocham data shows.
With GST on cement cut from 28 percent to 18 percent, construction costs are expected to fall by 3-5 percent, potentially reducing home prices by 1-1.5 percent for buyers, Puri said. This can save homebuyers Rs 1-3 lakh on purchases, particularly benefiting affordable and mid-segment housing where cost sensitivity is high. “The combination of stable interest rates and lower construction costs creates a favourable environment for housing demand, especially during the ongoing festive season,” he said.
Manju Yagnik, vice chairperson of Nahar Group and senior vice president of NAREDCO- Maharashtra, said the steady stance aligns well with the natural uptick in festival housing demand. For the real estate sector, this consistency is a positive enabler during the festive season, when home-buying activity traditionally peaks.
“Predictable EMIs give buyers the confidence to act on long-awaited decisions, especially with the recent GST rationalisation already improving affordability. Developers, too, benefit from clarity in financing, enabling timely project planning and execution,” she said.
A stable rate environment, combined with festive sentiment, GST relief and strong economic fundamentals, will ensure that real estate enters 2026 on a firm growth trajectory, Yagnik said.
Amit Modi, Director, NCR-based County Group, said the buyers, who were on the fences, will respond favourably and continue with real estate purchases this festival season. It also signals RBI’s confidence in the Indian growth story, which again will ultimately benefit the real sector.
Developers eye long-term stability
Ashok Kapur, chairman, Krishna Group and Krisumi Corporation, said the decision offers much-needed predictability in planning, though a rate cut could have accelerated near-term demand.
The real estate sector continues to benefit from earlier reductions and lending rate adjustments by commercial banks, Kapur said. For developers, it provides much-needed stability, enabling planning and timely execution while building confidence in the sector’s long-term prospects, he said.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
