RBI holds repo rate steady: Good news for homebuyers, but affordable housing still faces hurdles
Real estate developers and consultants broadly welcomed the RBI's decision, saying a stable interest rate environment will strengthen buyer confidence, support long-term investment decisions
- Aug 5, 2026,
- Updated Aug 5, 2026 11:44 AM IST
The Reserve Bank of India (RBI) on Wednesday kept the benchmark repo rate unchanged at 5.25% even as the West Asia conflict continues to rage on, in line with market expectations, opting to maintain policy stability amid global uncertainties and inflationary risks. The decision is expected to provide continuity in borrowing costs for homebuyers and developers, even as industry leaders believe that lower interest rates alone may not be enough to revive demand in the affordable housing segment.
Real estate developers and consultants broadly welcomed the RBI's decision, saying a stable interest rate environment will strengthen buyer confidence, support long-term investment decisions and sustain momentum across residential and commercial real estate. However, some experts cautioned that affordability challenges continue to weigh on the mass housing market.
READ THIS: RBI MPC update: Central bank keeps repo rate unchanged at 5.25%, says Governor Sanjay Malhotra
Affordable housing remains the biggest concern
Anuj Puri, Chairman of ANAROCK Group, said the RBI's decision offers stability but is unlikely to significantly boost affordable housing demand, which remains highly sensitive to borrowing costs.
"The unchanged policy rate is a welcome signal of stability amid the ongoing macroeconomic uncertainty, but it is not enough to reignite the mass-market housing cycle," Puri said.
According to ANAROCK's Q2 2026 data, housing sales across the top seven cities declined 6% year-on-year to around 90,715 units, while affordable housing accounted for only 6% of total new launches despite an overall 7% rise in fresh supply to nearly 1.06 lakh units.
Puri noted that average residential prices continue to rise by around 7% annually across major cities, limiting affordability for first-time buyers. "The market is moving towards a more balanced position, but this balance is being driven by luxury housing rather than the affordable segment that supports broad-based homeownership," he added.
Stable policy to strengthen buyer confidence
Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, described the RBI's move as a balanced decision amid inflationary pressures and geopolitical uncertainties.
"Knight Frank welcomes the RBI's decision to keep the policy rates unchanged. The move reflects the central bank's balanced approach of supporting economic growth while remaining watchful of evolving global and domestic risks," Baijal said.
He added that a stable interest rate environment is expected to reinforce buyer confidence, provide certainty for businesses and investors, and ensure continued access to affordable financing. According to Baijal, policy continuity should sustain housing demand and investment activity across both residential and commercial real estate while supporting the sector's long-term growth.
DON'T MISS: RBI MPC: Gov Malhotra raises GDP growth projection for this year to 6.7% from 6.6%
Developers see positive sentiment
Amrita Gupta, Director, Manglam Group and CEO of Manglam Spa & Resorts Pvt. Ltd., said policy consistency is as important as interest rates themselves.
"The RBI's decision to maintain the repo rate at 5.25% provides a welcome sense of stability at a time when consistency in policy is as important as market confidence," she said.
Gupta believes that a stable rate environment encourages long-term homeownership decisions while complementing infrastructure-led growth in Tier 2 cities. She added that policy continuity would help create sustainable, well-planned communities and support long-term sectoral growth.
Echoing similar views, Aman Sarin, Director and CEO of Anant Raj Limited, said the decision comes at an important time when geopolitical tensions in West Asia continue to exert pressure on input costs.
"A steady rate scenario helps in better financial planning and provides clarity for both businesses and homebuyers," Sarin said. He noted that current home loan rates remain at reasonable levels and that certainty in monthly repayments is becoming a key factor influencing purchase decisions.
Stability to aid long-term planning
Manik Malik, President and CEO of BPTP Limited, said the RBI's decision reinforces stability in a housing market that continues to be supported by strong end-user demand and improving infrastructure.
"While interest rates remain an important consideration for homebuyers, today's market is increasingly being shaped by long-term value creation rather than short-term policy movements," Malik said.
ALSO READ: RBI MPC 2026: Central bank trims FY27 inflation outlook to 5%, signals price stability focus
Overall, the RBI's decision was welcomed across the real estate sector as a measure that provides certainty at a time of global economic volatility. While developers expect stable rates to support buyer sentiment and investment activity, industry experts maintain that improving affordability, particularly in the budget housing segment, will remain critical for achieving broad-based growth in India's residential real estate market.
The Reserve Bank of India (RBI) on Wednesday kept the benchmark repo rate unchanged at 5.25% even as the West Asia conflict continues to rage on, in line with market expectations, opting to maintain policy stability amid global uncertainties and inflationary risks. The decision is expected to provide continuity in borrowing costs for homebuyers and developers, even as industry leaders believe that lower interest rates alone may not be enough to revive demand in the affordable housing segment.
Real estate developers and consultants broadly welcomed the RBI's decision, saying a stable interest rate environment will strengthen buyer confidence, support long-term investment decisions and sustain momentum across residential and commercial real estate. However, some experts cautioned that affordability challenges continue to weigh on the mass housing market.
READ THIS: RBI MPC update: Central bank keeps repo rate unchanged at 5.25%, says Governor Sanjay Malhotra
Affordable housing remains the biggest concern
Anuj Puri, Chairman of ANAROCK Group, said the RBI's decision offers stability but is unlikely to significantly boost affordable housing demand, which remains highly sensitive to borrowing costs.
"The unchanged policy rate is a welcome signal of stability amid the ongoing macroeconomic uncertainty, but it is not enough to reignite the mass-market housing cycle," Puri said.
According to ANAROCK's Q2 2026 data, housing sales across the top seven cities declined 6% year-on-year to around 90,715 units, while affordable housing accounted for only 6% of total new launches despite an overall 7% rise in fresh supply to nearly 1.06 lakh units.
Puri noted that average residential prices continue to rise by around 7% annually across major cities, limiting affordability for first-time buyers. "The market is moving towards a more balanced position, but this balance is being driven by luxury housing rather than the affordable segment that supports broad-based homeownership," he added.
Stable policy to strengthen buyer confidence
Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, described the RBI's move as a balanced decision amid inflationary pressures and geopolitical uncertainties.
"Knight Frank welcomes the RBI's decision to keep the policy rates unchanged. The move reflects the central bank's balanced approach of supporting economic growth while remaining watchful of evolving global and domestic risks," Baijal said.
He added that a stable interest rate environment is expected to reinforce buyer confidence, provide certainty for businesses and investors, and ensure continued access to affordable financing. According to Baijal, policy continuity should sustain housing demand and investment activity across both residential and commercial real estate while supporting the sector's long-term growth.
DON'T MISS: RBI MPC: Gov Malhotra raises GDP growth projection for this year to 6.7% from 6.6%
Developers see positive sentiment
Amrita Gupta, Director, Manglam Group and CEO of Manglam Spa & Resorts Pvt. Ltd., said policy consistency is as important as interest rates themselves.
"The RBI's decision to maintain the repo rate at 5.25% provides a welcome sense of stability at a time when consistency in policy is as important as market confidence," she said.
Gupta believes that a stable rate environment encourages long-term homeownership decisions while complementing infrastructure-led growth in Tier 2 cities. She added that policy continuity would help create sustainable, well-planned communities and support long-term sectoral growth.
Echoing similar views, Aman Sarin, Director and CEO of Anant Raj Limited, said the decision comes at an important time when geopolitical tensions in West Asia continue to exert pressure on input costs.
"A steady rate scenario helps in better financial planning and provides clarity for both businesses and homebuyers," Sarin said. He noted that current home loan rates remain at reasonable levels and that certainty in monthly repayments is becoming a key factor influencing purchase decisions.
Stability to aid long-term planning
Manik Malik, President and CEO of BPTP Limited, said the RBI's decision reinforces stability in a housing market that continues to be supported by strong end-user demand and improving infrastructure.
"While interest rates remain an important consideration for homebuyers, today's market is increasingly being shaped by long-term value creation rather than short-term policy movements," Malik said.
ALSO READ: RBI MPC 2026: Central bank trims FY27 inflation outlook to 5%, signals price stability focus
Overall, the RBI's decision was welcomed across the real estate sector as a measure that provides certainty at a time of global economic volatility. While developers expect stable rates to support buyer sentiment and investment activity, industry experts maintain that improving affordability, particularly in the budget housing segment, will remain critical for achieving broad-based growth in India's residential real estate market.