RBI leaves repo rate unchanged at 5.25%

Stable lending rates expected to support buyer sentiment ahead of Dasara and Diwali

Property Pulse

The Reserve Bank of India (RBI) has kept the repo rate unchanged at 5.25 per cent for the fourth consecutive monetary policy review, citing geopolitical tensions, rising fuel prices and global economic uncertainties. The decision is expected to keep home loan interest rates stable, providing a positive backdrop for the upcoming festive season, when housing demand typically strengthens.

Real estate experts believe stable borrowing costs will encourage prospective homebuyers who have been postponing purchase decisions due to uncertainty over interest rates. With Dasara and Diwali approaching, developers are also expected to roll out festive offers to attract buyers, further supporting residential sales. However, affordability continues to remain a concern.

Rising construction costs and an annual increase of around 7 per cent in home prices have increased the financial burden on buyers, particularly in the mid-income and affordable housing segments. While stable interest rates provide relief, industry observers say affordability challenges continue to influence purchase decisions.
The affordable housing segment remains under pressure.

During the second quarter of 2026, housing sales across India's top seven cities declined 6 per cent year-on-year to 90,715 units. Affordable homes also accounted for only 6 per cent of new residential launches during the quarter, reflecting subdued developer activity in the segment. Industry experts say the RBI's decision provides policy stability and helps maintain confidence in the housing market.

However, they believe additional policy support and incentives will be required to revive affordable housing demand and improve homeownership opportunities for first-time buyers.

Policy Watch

• RBI's decision provides policy stability.
  
• Helps maintain confidence in the housing market.
  
• Home prices have risen around 7 per cent annually.
  
• Q2 housing sales in the top seven cities fell 6 per cent year-on-year.
  
• Affordable housing accounted for 6 per cent of new launches.