RBI Holds Repo Rate at 5.5%: Steady Borrowing Costs to sustain momentum in the Real Estate Sector

New Delhi, August 08, 2025:  In a widely anticipated move, the Reserve Bank of India (RBI) has maintained the repo rate at 5.5% during its August monetary policy review, a decision welcomed by the real estate sector. With inflation easing and economic uncertainty stemming from US trade tariffs, the RBI’s neutral stance offers much-needed stability for homebuyers and developers alike. Industry experts say that unchanged borrowing costs will continue to support demand for housing loans, ensuring sustained momentum in both affordable and premium housing segments.

Mr. Prashant Sharma, President, NAREDCO Maharashtra
“The RBI’s decision to maintain the repo rate at 5.5% despite easing inflation reflects a cautious yet balanced approach to managing global headwinds and domestic stability. For the real estate sector, a status quo on rates ensures continued momentum in homebuyer sentiment and sustains the affordability factor in housing. However, given the moderating inflation and macroeconomic uncertainties, the industry looks forward to a calibrated rate cut in upcoming reviews to further support growth, especially in the affordable and mid-income housing segments.”

Mr. Kaushal Agarwal, Chairman, The Guardians Real Estate Advisory
“The real estate sector has shown resilience despite global uncertainties. With inflation under control and GDP growth projected steadily, a repo rate cut would have been the perfect catalyst to trigger festive season demand. However, the RBI’s decision to hold the rate steady keeps the environment predictable and EMIs affordable. The industry remains cautiously optimistic that a more dovish stance could follow if inflation stays within the comfort zone.”

Mr. Vikas Jain, CEO, Labdhi Lifestyle and President, NAREDCO Maharashtra NextGen
“While the RBI’s decision to maintain the repo rate ensures monetary stability, the sector was optimistic about a rate cut given the drop in inflation to 2.1%. Affordable housing and first-time homebuyers remain extremely interest rate sensitive. A cut would have significantly pushed housing demand forward. Nevertheless, we hope the RBI remains open to easing rates in the upcoming cycles to spur broader economic and sectoral growth.”

Ms. Shraddha Kedia-Agarwal, Director, Transcon Developers
“With inflation easing and homebuyer interest still high, the real estate sector was hopeful for a rate cut to further catalyse housing demand. However, the RBI’s decision to maintain status quo reflects a watchful approach to global uncertainties like trade tariffs. Stability in rates does support long-term planning for both developers and homebuyers, but a softer interest rate regime would provide the real boost required for deeper market penetration, especially in urban metros like Mumbai.”

Mr. Dhruman Shah, Promoter, Ariha Group
“In a scenario where global trade dynamics are shifting and inflation has visibly moderated, the real estate industry expected some policy support via rate easing. Nonetheless, the RBI’s decision to maintain the current rate suggests that stability is being prioritized. While this helps developers plan without sudden shifts in financial costs, we anticipate a pro-growth signal in the next review, especially to give a push to the affordable housing segment.”

Mr. Nihar Jayesh Thakkar, Founder, The Mandate House Pvt. Ltd.
“The MPC’s decision to keep the repo rate unchanged is a balanced one, considering the broader economic landscape. For real estate stakeholders—especially in the advisory and sales ecosystem—this offers continuity in buyer behavior and home loan affordability. That said, a future rate cut would help unlock fence-sitters and attract a new wave of aspirational buyers, especially in the mid- and premium segments.”