How RBI’s Unchanged Repo Rate Impacts Homebuyers And Developers In 2025?

The Reserve Bank of India (RBI) recently concluded its Monetary Policy Committee (MPC) meeting on October 1, 2025, deciding to maintain the repo rate at 5.5%. 

This decision, described as a neutral stance, comes at a crucial time for India’s housing sector, which has experienced notable shifts in demand and pricing trends this year.

The decision to hold rates steady is strategic, reflecting the RBI’s cautious approach amid global economic uncertainties. As inflation remains within manageable limits—easing to 2.6% for FY26—the RBI balances the need for growth without triggering inflationary pressures. 

Core inflation has been significant, rooted in essential sectors like housing, health, and transport, influencing consumer behavior in the housing market.

The housing price index showed moderate growth, reaching 3.1% in Q4 2024-25, indicating a resilient but cautious property market. Housing loans, constituting nearly half of personal loans, have remained stable.

However, a recent deceleration in personal loan growth, including housing loans, suggests potential affordability concerns among consumers.

Despite these challenges, the services sector, a strong driver of economic growth, witnessed a 9.5% increase in financial and real estate services during Q1 2025-26, contributing significantly to overall economic expansion. 

Moreover, housing and vehicle loans have played a pivotal role in sustaining this growth, alongside personal consumption trends.

Industry experts have weighed in on the implications of the MPC’s neutral stance:

1. Sandeep Ahuja, Global CEO of Atmosphere Living, commented on the growing trend toward premium housing, noting that over 60% of home sales are now above Rs 1 crore. He remarked, “The RBI’s decision gives confidence to homebuyers making long-term investments in luxury homes, especially in cities like Mumbai and Bengaluru, where demand continues to thrive.”
2. Amit Jain, CMD of Arkade Developers, also expressed optimism, acknowledging that maintaining the repo rate provides stability during a pivotal festive season. “While a rate cut would have encouraged greater investments, the status quo ensures residential sales momentum is sustained,” he said.

The RBI’s decision is crucial as it coincides with the festive buying season, traditionally marked by increased home sales. 

With stable mortgage rates, developers have the confidence to launch new projects without the fear of rising borrowing costs, which could hinder the overall market momentum.

Steady EMIs: Borrowers will not face immediate changes to their monthly payments, which helps maintain consumer sentiment during a key buying period.

Market Confidence: Developers can plan their long-term strategies more effectively, aligning them with seasonal trends.

Consumer Sentiment: The reassured environment is likely to encourage prospective homebuyers, particularly first-time buyers, to enter the market.

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The RBI’s decision to hold the repo rate steady provides much-needed stability to the housing sector amidst fluctuating global conditions.

Although some experts express the need for greater stimulation through rate cuts, the current climate allows for sustained growth owing to a combination of stable rates and emerging consumer preferences for higher-end housing.

As the festive season approaches, the stage is set for a potential uptick in housing transactions, providing a positive outlook for developers and buyers alike.