On Wednesday, the real estate associations Credai and Naredco appealed to the Reserve Bank of India (RBI) to decrease the key Repo rate in the upcoming monetary policy meeting to stimulate demand for residential properties, particularly affordable homes. They expressed hope that banks would extend the benefits of prior rate cuts to both existing and new home loan borrowers. The RBI maintained key interest rates on Wednesday, awaiting clearer insights into the impact of U.S. tariffs, as well as the effects of previous rate cuts and recent tax reductions. Since February, the Repo rate has been reduced by 100 basis points to 5.5 percent.
Shekhar Patel, President of CREDAI, commented on the RBI’s decision, stating, “The RBI’s choice to keep the Repo rate steady at 5.5 percent provides the necessary stability to the housing sector amid global uncertainty. Predictable borrowing costs enable buyers to plan for the long term and give developers the clarity needed to advance financing and projects.” He pointed out that the recent adjustments in GST rates have improved consumer sentiment and elevated demand across various sectors. While markets had expected a 25-basis point cut, Patel remained optimistic that the RBI would implement a total 50-basis point reduction this fiscal year in two phases, further supporting market activity.
He emphasized the importance of banks passing these benefits to both new and existing borrowers, ensuring that policy continuity and tax reforms lead to sustained demand during the festive season. In the first nine months of 2025, housing sales in the top seven cities have declined compared to the previous year due to a higher base effect and a significant increase in residential property prices in the primary housing markets of these cities. G Hari Babu, President of NAREDCO, welcomed the RBI’s decision to maintain the Repo rate at 5.5 percent, especially with the projected real GDP growth of 6.8 percent.
However, he argued that, just as the government has supported various sectors by reducing GST, a Repo rate cut is essential to invigorate the real estate market. He urged the RBI to consider lowering the Repo rate below 5.5 percent in the next monetary policy meeting, stating, “Reduced interest rates will enhance homebuyers’ confidence, elevate housing demand, and particularly benefit the affordable housing sector. Industries associated with real estate, such as cement, steel, electricals, piping, and interiors, will also experience growth.” CREDAI and NAREDCO represent the two primary industry bodies for real estate developers, with a combined membership exceeding 15,000.