RBI keeps repo rate unchanged at 5.25%: Stable rates offer relief to home loan borrowers ahead of festive season

The decision has been welcomed by real estate stakeholders, who believe rate stability will support homebuyer confidence, developer planning and housing demand during the upcoming festive season.

"We welcome RBI’s decision to keep the repo rate unchanged at 5.25%. At this juncture, when worldwide situation is highly volatile, we appreciate this decision of RBI and hope that this will give positive vibes to the realty sector. Stability in interest rate will have positive impact on home buyers as well as developers and will maintain the momentum in demand for housing. This decision will also give fillip to construction activity, MSMEs, building material industries and lakhs of workers associated with it. The decision to keep the repo rate unchanged will also have positive impact on festive season sales of under-construction properties," said Parveen Jain, President, NAREDCO

"For homebuyers, predictable EMIs improve purchase planning and affordability, while developers benefit from greater visibility in project execution, financing, and long-term capital allocation. The most supportive RBI policy signal for the housing sector would be a continued commitment to price stability, a predictable interest rate trajectory, faster transmission of policy rates into home loan pricing by banks, and adequate systemic liquidity to ensure efficient credit flow," said Dharmendra Raichura- VP & Head of Finance at Ashar Group.

"For real estate, rate stability is a positive signal heading into the festive season, which is typically the strongest period for housing demand in India. Predictable borrowing costs give homebuyers the confidence to act on long-deferred purchase decisions, while developers benefit from a stable financing environment to plan launches around the festive calendar. We expect this continuity to support healthy residential sales momentum through the second half of 2026, particularly in the mid and premium segments where affordability is closely tied to interest rate sentiment," said Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE

The unchanged policy rate is a welcome signal of stability amid the ongoing macroeconomic uncertainty. "It is not enough to reignite the mass-market housing cycle. ANAROCK’s Q2 2026 data shows that total sales in the top seven cities fell 6% year-on-year to about 90,715 units, while affordable housing supply has fallen to just 6% of total launches even as overall new supply increased 7% year-on-year to about 1.06 lakh units. This mismatch is the main area of concern. Affordable housing demand remains very rate-sensitive, and with average residential prices still growing at 7% annually across the top cities, rate steadiness alone will do little to improve affordability," said Anuj Puri, Chairman - ANAROCK Group.

The August RBI MPC meeting comes at a time when the macroeconomic environment is continuing to remain challenging, amid the ongoing impact of the US-Iran war in the Middle East on domestic growth and inflation dynamics.

In June, the Reserve Bank had kept its key policy rate unchanged at 5.25 per cent and adopted a cautious wait-and-watch stance as policymakers assessed the fallout of the West Asia conflict.

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