RBI Keeps Repo Rate Steady at 5.5%; Experts Predict Festive Boost for Housing Demand
The Reserve Bank of India (RBI) has chosen to hold the repo rate at 5.5% in its latest monetary policy meeting. Despite calls from the real estate sector for a rate cut to support affordable housing, the central bank opted for caution amid global tariff issues and economic uncertainties. Experts believe that a lower repo rate might have reduced borrowing costs and stimulated buyer activity, particularly in the budget housing segment.
Even though there was no rate reduction, industry leaders expect the upcoming festive season to positively impact home loan demand. Improved consumer sentiment, seasonal offers, and stable borrowing rates are likely to encourage potential buyers. Many developers are expected to introduce flexible payment plans and discounts to maintain market interest.
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Recent data shows a decline in housing sales in major Indian cities, with a notable 20% drop in Q2 2025 compared to the same period last year. Analysts suggest that rising global tariffs and economic uncertainty are weighing on buyer confidence. However, experts believe that steady repo rates bring some degree of predictability to both developers and homebuyers, which is crucial in uncertain times.
The RBI's decision also reflects its cautious stance despite easing inflation and relatively strong credit growth. Stable policy rates help preserve home loan affordability, especially in the mid and lower income groups. Some banks have already reduced interest rates on housing loans, and further transmission of past rate cuts is expected in the coming months.
Industry leaders agree that while the RBI chose not to lower the rate now, further cuts might be possible later in the year depending on economic indicators. Until then, the focus remains on steady growth, easing inflation, and improving market momentum through festive season demand and ongoing policy support.
