The Reserve Bank of India (RBI) has increased its benchmark repo rate by 25 basis points to 5.5%, marking its first rate hike since February 2023. The decision was taken unanimously by the Monetary Policy Committee (MPC), led by Governor Sanjay Malhotra.
The central bank has raised the rate from 5.25% to 5.5% against a backdrop of rising inflation, elevated oil prices and a weaker rupee. These factors have increased pressure on the domestic economy and raised concerns over the potential impact of higher input and import costs.
The repo rate influences the cost at which commercial banks access funds from the RBI. A change in the policy rate can therefore affect lending rates across the banking system. Borrowers with floating-rate loans, including home loans, may see changes in their interest costs or repayment schedules as banks respond to the latest policy decision.
The move also marks a shift in the RBI’s recent interest-rate approach, with the central bank now placing greater emphasis on containing renewed inflationary pressures. Higher crude oil prices remain a key concern because India imports a large share of its oil requirements, while a weaker rupee can make these imports more expensive.
For consumers and businesses, the impact will depend on how banks transmit the rate increase to their lending rates. Higher borrowing costs could influence demand for housing, vehicles, business expansion and other credit-dependent activities in the months ahead.
Industry Experts Opinions
Mr. Pratik Tibrewala, SVP & Head Corporate Finance, M3M India
“The RBI’s 25 bps repo rate hike to 5.50% is a calibrated step to anchor inflation amid global volatility. While borrowing costs may inch up marginally, long-term stability of the rupee helps in attracting global capital and will benefit the real estate sector. The demand for premium housing and commercial assets continues to be strong and is driven by wealth creation.”
Mr. Rajan Luthra, CFO, ACE- Action Construction Equipment
“The RBI’s decision to raise the repo rate by 25 basis points to 5.50% reflects a calibrated tightening in response to evolving inflationary pressures and persistent global uncertainties. While geopolitical developments and global commodity price volatility remain key risks, India’s economic fundamentals continue to remain resilient.
For the construction equipment sector, higher financing costs may impact investment decisions in the near term. However, sustained government capex and infrastructure activity across roads, railways and urban development should continue to support demand and sector growth. At ACE, we remain focused on product innovation and strengthening our capabilities to meet India’s evolving infrastructure needs. With strong long-term fundamentals, we remain committed to our growth plans and supporting India’s infrastructure development.”
Mr. Mukesh Choudhary, Managing Director, Accuspace, a real estate company
A repo rate hike and signal of future hikes could have some impact on the office real estate segment, primarily through higher financing costs and its potential influence on corporate expansion and capital expenditure decisions. However, seeing the underlying demand for quality office space which remains supported by business expansion, GCC growth and the need for modern, well-located workplaces, the demand for office space will continue its momentum. Developers may see some increase in the cost of capital, but projects with strong tenant visibility, robust fundamentals and good connectivity are likely to remain attractive. A stable interest-rate environment would, of course, provide greater confidence for new development and investment decisions, but we believe the office market can remain resilient even in a moderately higher-rate environment.
Mr. Ankur Jalan, CEO, Golden Growth Fund (GGF), a category II Real Estate focussed Alternative Investment Fund (AIF)
A repo rate hike, in view of the rising inflation, will have a broader impact on the cost of capital across the real estate ecosystem. For AIFs, which typically deploy patient institutional capital into development, redevelopment and asset-backed opportunities, a higher interest-rate environment can influence project financing costs, acquisition valuations and investment timelines. At a time when institutional capital is showing strong confidence in Indian real estate, policy stability remains important for maintaining investment momentum. A rate hike, which could be transmitted by banks within 1-3 months, could also make developers and investors more selective, with greater emphasis on projects with strong fundamentals, execution visibility and clearly defined exit strategies.
Mr. Suresh H. A., Managing Director, Sanjeevini Group
The residential market continues to be supported by strong end-user demand, employment growth and infrastructure-led development despite the increase in home prices. A repo rate hike at this stage and signal of further hikes in the future may impact housing demand going forward and further put some pressure on affordability by increasing home-loan costs, particularly for first-time and financing-dependent buyers. However, banks could hold on to the current rates with a view to support the festive consumption boost as stable interest-rate environment would help sustain buyer confidence and provide greater visibility to both homebuyers and developers.
Mr. Lalit Parihar, Managing Director, Aaiji Group, a real estate firm
The residential market has shown resilience, with sales continuing to remain steady despite evolving macroeconomic conditions. However, a repo rate hike and indication of further hik in the future will have an impact on homebuyer sentiments as they may prefer to postpone their purchase especially in the mid-income segment. While repo rate hike has become inevitable in view of the rising inflation, banks may prefer to wait until the passage of festive season to pass on the rate increase. Affordability is already a concern among buyers and by increasing borrowing costs may hurt certain section of homebuyers.
Mr. Keshav Mangla-GM-Business Development -Forteasia Realty
“The 25 basis point repo rate increase to 5.50% will have a bearing on the residential demand, with the lower end and mid segments being the most vulnerable on account of their sensitivity to change inEMIs. Conversion will slow down during the festive quarter, with luxury housing being an exception. The larger issue is that the rate hikes have sent a signals that the borrowing cost may remain higher for longer, with ready-to-move inventory likely to benefit over launches as buyers tend to be wary of taking on additional liability. Unless there is a spike in demand, new project launches may have to wait. With the demand moderation, price correction will remain on the cards with buyers having the upper hand in a buyers’ market scenario”
Mr. Anurag Goel, Director,Goel Ganga Developments
“Coming to the home loan segment, the increase in repo rate will directly impact floating rate borrowers and hence have a bearing on the overall demand for real estate. Taking the example of a Rs 50 lakh loan at 20 year tenure, a 25 basis point increase will result in additional EMI of around Rs 780 per month or Rs 1.88 lakh extra interest payout over the life of the loan. While lenders may also look to increase the tenure to reduce EMI burden, it will continue to be a challenge for first time buyers to qualify for a home loan. For investors looking to leverage on homebuyer tax benefits, a higher down payment will be required. While real estate demand will not collapse, affordability will take a hit.”
Mr. Hardik Shah, Director, Shyam Group -Dholera SIR
“Developer financing will also be impacted on account of higher cost of funding which will have a bearing on project pricing. With a 25 basis point increase, the existing project launches will see higher EMI burden on account of higher interest outgo, while approvals for new launches will also be taken with caution. It will be interesting to see how the market responds to this rate hike, with subsidies, benefits and flexible payment options being on offer during the festive quarter. Unless there is a subsequent rate hike, the impact will be more visible on project viability for mid segment developers with a high proportion of inventory under development, with leverage being passed on to the buyers. While demand will hold, job security and inventory clearance will be the key factors driving sales in the near term.”
Mr. Vijay Raundal, Managing Director, Teerth Realties
“As far as commercial real estate is concerned, the transmission of increase in repo rate will have varied impact on office space, warehousing and retail segment, with demand being driven by business cycles and return to office trends. With increased borrowing cost, cap rates for commercial real estate may also see increase, with impact being more visible on REITs and institutional investors. While demand for Grade A offices with assured rentals will sustain, there may be further delay in refinancing for weaker assets. For retail real estate, increase in EMI burden may further reduce footfalls with discretionary spending being curtailed, with impact being more visible on capital expenditure and new supply in the short term. Stability in money market rates is critical for commercial real estate to maintain its appeal as an asset class.”
Mr. Nikhil Mawale, Co-Founder & CEO, PropertyDrone Realty
“The increase in fixed deposit rates will also have an impact on capital allocation with real estate having to compete with safer investment options on the table. End users considering fixed deposit versus real estate must factor in the illiquidity of the latter and associated maintenance cost. A 25 basis point increase in repo rate will lead to reallocation of savings by conservative investors away from second home purchases and land banking. With affordability and liquidity being the primary concern, end-users must focus on ready to move inventory. Buyers should look to negotiate on prices and leverage on existing benefits to offload inventory. With another round of rate hike expected later this year, higher EMI burden will further reduce affordability in the real estate sector.”
Mr. Pradeep Aggarwal, Founder and Chairman, Signature Global (India) Ltd.
“The RBI’s decision to raise the repo rate by 25 bps from 5.25% reflects its commitment to price stability amid a challenging macro backdrop. While housing demand has been supported by rising incomes, urbanisation and a growing aspiration for homeownership, and has stayed resilient even through global uncertainty, volatile crude prices, currency pressures and persistent inflation risks have made the central bank’s task a delicate one. The RBI has consistently balanced growth and stability, and this decision reflects the prevailing macro realities.
That said, a stable repo rate would have better sustained the current demand momentum. Higher borrowing costs may temporarily moderate buyer sentiment, particularly in the mid-income segments. Still, with strong fundamentals, and the upcoming festive season, we expect the sector to remain resilient.”
Mr. Yashank Wason, Managing Director, Royal Green Realty
“The real estate industry is expected to be somewhat impacted by the RBI’s 25 basis point increase in repo rates, which raised the policy rate to 5.50%. For homebuyers with floating-rate loans, rising borrowing costs might slightly raise EMIs, but for those with steady incomes and lengthy investment horizons, the effect should be tolerable. Depending on the current lending rate, a 25 basis point rise on a ₹50 lakh, 20-year home loan could result in a slight increase in EMI. Given India’s robust underlying housing demand, urbanization, and 7.8% GDP growth in the first quarter of FY27, we think the industry is still robust and fundamentally sound.”
Mr. Varun Garg, Director, Karyan Group
“The 25 bps repo rate hike is a measured step, and we expect its impact on residential real estate to be limited. Markets like Noida and Ghaziabad are emerging as strong growth corridors, with improving metro connectivity, expressway access, and better social infrastructure drawing both end-users and investors. Homebuyers are choosing these markets for their affordability, larger homes and long-term appreciation potential, and a marginal rise in EMIs is unlikely to change the intent.The wider NCR continues to offer compelling residential opportunities. We remain confident that housing demand will stay resilient in the coming quarters.”
Mr. Rishabh Periwal, Sr. Vice President, Pioneer Urban Land and Infrastructure Ltd . says,
“The 25 bps repo rate hike is a calibrated move, and we expect its impact on real estate to remain contained. In gurugram, the luxury residential segment continues to see strong demand from affluent buyers and senior professionals who prioritise space, design, and lifestyle over marginal changes in EMIs. The commercial segment stands equally resilient, with growing demand from GCCs and a steady appetite for premium workspaces along key corridors. Backed by robust infrastructure and connectivity, Gurugram remains one of the most dynamic markets in the country. We remain optimistic about demand across both segments in the quarters ahead.
Mr. Manik Malik, CEO & President, BPTP
“The RBI’s decision reflects the strength and resilience of the Indian economy, which provides policymakers the room to act decisively on emerging inflationary pressures. For real estate, the larger opportunity remains firmly intact — rising incomes, rapid urbanisation, infrastructure creation and the growing aspiration for home ownership continue to drive long-term demand. A stable macroeconomic environment, anchored inflation and sustained economic growth provide the strongest foundation for consumer confidence and investment. We remain positive on the long-term outlook for housing and believe quality real estate will continue to be an important asset for both end-users and investors.”
Mr. Rahul Singla, Director, MAPSKO Group
“The RBI’s move to raise the repo rate by 25 basis points is aligned with the broader objective of ensuring economic stability and keeping inflation under control. Although it may slightly increase the cost of borrowing, the real estate sector remains supported by strong underlying demand and positive long-term growth drivers. Continued infrastructure investments, urban expansion, and rising aspirations among homebuyers are expected to sustain market activity. We believe the sector’s fundamentals remain intact, and demand for well-planned residential developments will continue to remain resilient in the months ahead.”
Mr. Vivek Singhal, Founder & CEO, Multigen
“The RBI’s decision to raise the repo rate by 25 basis points to 5.50% should be viewed as a calibrated response to inflationary pressures rather than a signal of weakening economic momentum. A stable inflation environment is ultimately beneficial for both consumers and businesses, including the real estate sector. While financing costs may witness a modest increase, housing demand is increasingly being driven by lifestyle upgrades, wealth creation, and aspirations rather than purely interest rate considerations. Given the sector’s strong fundamentals and improving buyer confidence, we expect residential demand to remain healthy, especially across premium and mid-income segments in key urban markets.”
Mr. Sidharth Chowdhry, Managing Director at Dalcore
“The RBI’s decision to increase the repo rate by 25 basis points to 5.50% comes at an important juncture for the Indian economy, with policymakers continuing to balance growth with price stability. For the real estate sector, the move is likely to encourage a measured approach among both buyers and developers. At the premium end of the market, however, we continue to see demand supported by strong consumer aspirations, improving economic confidence and a preference for quality-led developments. At Dalcore, we believe that well-designed homes in the right locations continue to hold strong long-term appeal, even as the broader interest-rate environment evolves. The current policy direction also highlights the importance of financial discipline and creating genuine value for homebuyers. We remain optimistic about the sector’s long-term prospects and believe India’s structural growth, rising aspirations and increasing preference for differentiated living experiences will continue to support quality real estate.”
Mr. Anil Godara, Managing Director, J Estates
The senior living segment is fundamentally different from conventional housing because the purchase decision is often driven by life-stage requirements rather than interest-rate movements alone. A 25 bps increase may influence financing considerations, particularly for families supporting the purchase, but it does not change the underlying need for safe, accessible and professionally managed living environments. As India’s ageing population grows, senior citizens are increasingly looking for homes that provide healthcare access, social interaction, security and longevity. That structural demand is likely to remain relatively resilient even in a slightly higher-rate environment.
Mr. Parvinder Singh, CEO, Trident Realty
The modest increase in the repo rate may encourage some buyers to take a more measured approach, but it is unlikely to change the broader shift underway in Tier-II housing markets. Premium homes and plotted developments are increasingly finding favour as buyers look for larger spaces, better locations and greater flexibility in how they build and use their homes. In many emerging cities, buyers also see the purchase as a long-term asset decision. This combination of aspiration and investment value should continue to support demand, even as buyers remain mindful of financing costs.
Mr. Vikas Bhasin, Managing Director, Saya Group
“The RBI’s decision to increase the repo rate by 25 basis points is a positive and calibrated move that will help maintain healthy liquidity conditions while keeping inflationary pressures under check.
The Indian economy continues to remain resilient and maintain its growth momentum. Given that home loan interest rates are still at relatively attractive levels, a marginal increase in borrowing costs is unlikely to deter end-user homebuyers. We are witnessing strong demand in the real estate market and expect this momentum to continue, with end-users continuing to make purchase decisions and take advantage of festive offers and attractive discounts”
Mr. Jash Panchamia, Executive Director, Suraksha Infra And Developers Limited (Formerly Jaypee Infratech Limited)
“The RBI’s decision to raise the repo rate by 25 bps from 5.25% is a measured response to a complex global and domestic environment. Inflationary pressures, geopolitical tensions, energy price swings and a cautious global capital climate have left the central bank with limited room to maneuver. Monetary policy has to look at the broader economy, including interest-sensitive sectors like housing, and the RBI has acted with that larger picture in mind.
The immediate effect will be felt in home loan affordability, and some buyers may defer decisions in the short term. Even so, the demand drivers for real estate remain firmly in place. Our view is that a steady rate environment would have offered the sector more comfort, but long-term end-user demand should continue to anchor growth.”
Mr Vimal Nadar, National Director & Head of Research, Colliers India
“RBI has increased the repo rate upwards by 25 bps to 5.50%, while simultaneously changing the stance from “neutral” to “calibrated tightening”. This signals strict vigilance against inflationary pressures stemming from external volatilities and elevated crude prices. The Central Bank also noted that global headwinds could potentially become stronger, given recent reescalation in West-Asia crisis and cautioned against the likelihood of deacceleration in economic growth across countries.
For the real estate sector, although the increase in benchmark lending rate may soften near-term demand, the sector’s strong underlying fundamentals should help cushion the impact across most asset classes in India. A 40-bps upward revision in FY 27 GDP growth to 7.1% also indicates that India’s consumption driven economy should continue to be resilient benefiting from its demographic profile.
In case of residential segment, rise in borrowing costs is likely to drive homebuyers to adopt a nuanced & selective approach in their purchase decisions, particularly in price-sensitive categories. In this scenario, developers could absorb most of this financing pressure and provide comfort to homebuyers through festive discounts and innovative pricing plans, to boost sales.”
Mr. Shrinivas Rao, FRICS, CEO, Vestian
“The RBI’s 25-basis-point repo rate hike and a shift in stance from neutral to calibrated tightening signals a more restrictive monetary policy, reducing the likelihood of rate cuts in the near term. Higher mortgage rates could increase borrowing costs for homebuyers and raise the cost of capital for real estate developers. Developers may need to reassess their financing strategies and strengthen balance sheets to manage potential margin pressures and dampened demand, particularly if further rate hikes follow.”
Mr Piyush Bothra, Co-founder & CFO, Square Yards
“The 25-basis-point repo rate hike is a calibrated and prudent step by the RBI, particularly in the current inflationary environment. While higher borrowing costs may create some near-term pressure on home-loan affordability, the move also reinforces macroeconomic stability, a critical factor for the long-term health of the sector.
Importantly, the Indian residential market today is much more resilient than it was during earlier rate cycles. Demand is being supported by rising household incomes, urbanisation, improving infrastructure and a growing preference for quality housing. A 25-bps adjustment, therefore, is unlikely to fundamentally alter the underlying housing story, particularly for mid-income, premium and well-located projects.
For developers, the policy move also underlines the importance of maintaining strong balance sheets, disciplined capital structures and efficient project execution. Established developers with healthy financial positions should be better placed to absorb a moderate increase in financing costs without passing the entire impact on to consumers.”
Mr Akhil Saraf, Founder & CEO, Reloy
“With global bond markets under severe pressure, India’s relative stability and a measured repo rate hike are reassuring.
For real estate, this is constructive. While borrowing costs may rise marginally, greater macro stability reduces uncertainty and gives homebuyers more confidence to make long-term purchase decisions.”
Mr. Ashish Agarwal, Director, AU Real Estate
“The 25 bps increase in the repo rate is likely to bring a little more consideration to financing decisions, but the underlying housing demand in NCR remains steady. Homebuyers today are looking beyond the immediate cost of borrowing and evaluating factors such as location, connectivity, quality of construction and long-term value. For genuine end-users, the decision to buy is increasingly linked to lifestyle and life-stage needs. A measured approach from buyers is expected, with preference continuing to favour well-located, thoughtfully planned homes that offer a clear value proposition. “
Mr. Abhishek Singhania, Chairman & Managing Director, JK Urbanscapes
“The RBI’s decision to raise the repo rate by 25 bps is a clear response to the evolving inflation and global rate environment. While this will raise the cost of capital at the margin, the larger implication for real estate is likely to be greater selectivity in investment and development decisions rather than a broad-based slowdown. Projects with sound demand fundamentals, credible execution and a clear long-term proposition will continue to attract capital.
For hospitality and mixed-use developments, particularly in emerging markets, the focus will increasingly be on the strength of the underlying destination and the quality of the asset, rather than simply on the availability of inexpensive capital. We see this as a phase that will reward disciplined development and projects built on strong fundamentals.”
Mr. Ashish Jerath, President – Sales & Marketing, Smartworld Developers
“The RBI’s decision to raise the repo rate by 25 basis points to 5.50% reflects the need to respond to recent inflationary and external cost pressures while keeping the growth outlook intact. While the move will impact borrowing costs, a single rate increase is unlikely to alter the broader housing demand story, particularly given that economic activity and household purchasing power remain healthy. We have seen that buyers in the premium and luxury segments are mature and understand that interest rate movements are cyclical and will undergo multiple upward and downward revisions over the lifespan of their purchase. As a result, they do not try to time their purchases based on short-term rate fluctuations. However, this may have some impact on near-term sentiment within the first-time homebuyer segment. With the upward revision in the GDP growth and sustained momentum across strong consumer segments such as cars, we are confident that the overall positive economic sentiment will be able to overcome any impact of the rate change in buyer’s mind.”
Mr. Anurag Mathur, Chief Executive Officer, Savills India
“The RBI’s decision to raise the repo rate by 25 bps to 5.50% and shift its stance to calibrated tightening is mostly along the expected lines, given heightened global uncertainty, crude price shocks and other economic concerns such as food prices. While higher borrowing costs may pose some near-term challenges, India’s resilient domestic demand, strong economic fundamentals and sustained investment activity should continue to support business confidence.
For real estate, higher financing costs could further impact near-term residential demand, particularly in the affordable and mid-income segments. The demand for commercial real estate appears largely on track for now, but given the outlook, supply dynamics may need to be calibrated. The sector’s medium-term outlook remains positive though, as the MPC estimated GDP growth to remain healthy and higher than its previous projections. Greater capital discipline will be important all around including real estate, in the current monetary environment, which may tighten further in the near term.”
Mr. Kirthi Chilukuri, Founder & Managing Director, Stonecraft Group
“The 25-basis-point adjustment in the repo rate to 5.50% reflects the RBI’s continued focus on maintaining stability while supporting the broader economic environment. For the real estate sector, such policy movements are an important part of the larger economic cycle and provide an opportunity for the industry to remain disciplined and focused on sustainable growth. At Stonecraft Group, we believe that the long-term fundamentals of Indian real estate remain encouraging, supported by urbanisation, evolving lifestyles and growing demand for thoughtfully planned communities. While financing conditions may influence near-term decisions, buyers are increasingly looking beyond immediate considerations towards quality, sustainability and lasting value. We see this phase as an opportunity to strengthen efficiency, responsible development and customer-centric planning across the sector. With a balanced policy environment and continued economic progress, we remain confident that well-planned, sustainable developments will continue to find strong relevance among discerning homebuyers and investors.”
Mr. Devanshu Bansal, Director, UK Realty
“The RBI’s decision to raise the repo rate to 5.50%, coupled with its inflation projection of around 5.2%, reflects the growing macroeconomic concerns facing the economy. Elevated inflation, crude prices and ongoing geopolitical uncertainty could put some pressure on borrowing costs and affordability, making homebuyers more cautious and lengthening decision cycles.
However, buyer sentiment remains a mixed bag, with genuine end-user demand for quality homes continuing to hold up. The upcoming festive season could provide a much-needed positive trigger for the residential market, as homebuying typically gains momentum during this period. Attractive offers, new launches and greater flexibility from developers could help offset some of the pressure from higher borrowing costs.
While the near-term environment remains challenging, we believe underlying housing demand remains resilient. From the development perspective, the rate hike reinforces the importance of capital management and disciplined project execution. While financing costs may see some upward pressure, the long-term residential growth story remains intact, with housing demand and the festive season providing continued support to the market.”
Mr. Abhay Mishra, President & CEO, Jindal Realty
“Rates go up and down, and this sector has seen it all before. A 5.50% repo rate may mean slightly higher borrowing costs for a while, but buyers who need a home will still buy one. What matters most to them is whether the developer delivers what was promised. We’ll keep our focus on build quality and keeping to our timelines. We’re also working with banks to help customers find loan options that suit them, so the rate doesn’t get in the way of a good home.”
Mr Ashok Nehlia, Founder & CEO, Nehlia Developers
The RBI raised the repo rate by 25 basis points, taking it to 5.50%. This move may make buyers more careful when they look at residential real estate. Still, the premium farmhouse and plotted development space may feel the change in a different way.
People who choose this type of property think beyond monthly loan payments. They often want a certain way of life. They look for privacy, space, and land they can truly own. Many also see it as a path to long-term wealth, not just a short term purchase.
At Nehlia Developers, we think buyers keep showing interest in spacious second homes and lifestyle focused investments away from busy city areas. Even with higher rates, the need for good planning does not go away. Buyers should look for credible firms, clear deal terms, and projects that stand on solid ground.
The rate hike can push people to check their decisions more closely. But it does not change why quality farmhouse projects remain attractive. Better links to major urban hubs and stronger demand for larger homes near nature support the segment over the long run.
Mr Pawan Sharma, Managing Director, TRG Group
“The RBI raised the repo rate by 25 basis points to 5.50%. This move lands as India’s consumer spending scene and commercial property market are both shifting.
For malls and retail spaces, the first effects are more likely to show up in higher loan costs and tougher decisions on new projects. It is less about a sudden drop in what shoppers want.
At TRG Group, we think well placed retail destinations can still ride on India’s demand growth. A mall like TRG The Mall should keep doing well if it has a strong mix of tenants. It also needs experiences that feel different from the usual options. Consistent footfall matters too.
Higher rates can raise the cost of capital. That can make it harder to fund fresh development and expansions. At the same time, the current environment could create a sense of urgency among investors to assess the right commercial opportunities, as delaying investment decisions can lead to entering at a higher cost if interest rates and financing costs rise further. Even so, strong commercial assets can stay in demand. Good occupancy, known brands, and multiple income sources help a lot.
Developers and investors may put more weight on how good the asset is, how well it runs day to day, and how clear the long term cash flows look. In our view, this phase looks like adjustment and careful expansion. It does not look like a lasting stop for organised retail or mall driven commercial real estate.”
Mr. Dharmendra Raichura, VP & Head of Finance, Ashar Group
“The RBI’s 25 basis points repo rate hike to 5.5%, its first rate hike in four years, comes at a time when the balance between inflation management and sustaining economic momentum is becoming increasingly important. With inflationary pressures showing signs of broadening, elevated crude prices and external currency pressures, the calibrated hike reflects the need to manage price stability while maintaining economic momentum. For the real estate sector, the impact will largely depend on the magnitude and pace of any further increase. While higher rates could weigh on home-loan affordability, sustained end-user demand and income growth provide some resilience. A balanced policy would help maintain buyers’ confidence in the real estate market, while also giving developers more certainty about arranging finance and completing their projects.”
Mr. Amit Porwal, Director Aranyakaa Farms said
“The RBI MPC’s decision to raise the repo rate by 25 basis points to 5.50% comes at a time when the real estate sector is witnessing sustained demand across residential and commercial segments. While the rate hike could lead to a marginal increase in borrowing costs, the impact is likely to remain manageable in the near term. The sector’s fundamentals continue to be supported by urbanisation, improving consumer confidence and steady end-user demand. We believe a calibrated monetary policy approach will help maintain a balance between inflation management and economic growth.”
Raghunath Reddy Bhattagiri, Founder Triguna Projects
“A 25-basis-point increase in the repo rate to 5.50% reflects the MPC’s cautious approach towards maintaining macroeconomic stability. For real estate, higher interest rates may have some impact on home-loan affordability and buyer sentiment, particularly among price-sensitive consumers. However, the sector has demonstrated resilience and maturity, and genuine end-user demand is expected to remain steady. Developers are likely to remain focused on disciplined expansion, while buyers may increasingly prioritise value, quality and projects with strong fundamentals. Overall, we expect the real estate market to absorb this modest adjustment without any major disruption.”
Mr. HS Kandhari, Co-founder & Executive Director, Harmony Infra,
“The 25-basis-point repo rate hike will add to borrowing costs as lenders revise their rates, with buyers on tighter budgets likely to feel the impact more. In luxury housing, I expect the immediate effect on demand to be limited, as purchases are also shaped by lifestyle needs, financial strength and long-term ownership plans. Buyers taking sizeable home loans may review their financing costs, while the prospect of further rate hikes could lead some to take longer to decide. This increase alone is unlikely to cause a sharp change in demand, but the future direction of rates will matter. Buyers will continue to weigh the quality of the home, its value and the developer’s delivery record.”
Mr. Vikas Garg, Joint Managing Director, Ganga Realty
“The RBI’s decision to raise the repo rate by 25 basis points to 5.50% comes at a time when the Indian economy continues to demonstrate resilience and the real estate sector is entering its crucial festive season. While the rate movement may have a marginal near-term impact on borrowing costs, we believe the underlying fundamentals of residential real estate remain strong. Homebuyers today are increasingly looking at housing as a long-term investment, supported by improving infrastructure, rising incomes and growing aspirations for better homes. The festive period traditionally brings renewed buying activity, and we expect this momentum to remain healthy, particularly across well-established markets such as Gurugram. Developers will continue to focus on offering value-driven propositions and attractive schemes that support buyer decisions. Overall, we remain optimistic about the sector and expect end-user demand to remain resilient through the festive season and beyond.”
Mr Anuj Mehta, Director, Dhuleva Group
“The RBI has recently raised its repo rate by 25 bps to 5.50% amid a positive Economic growth outlook for FY27 with a forecast of 7.1%. The performance in the high-end real estate segment of South Bombay is just not due to land scarcity but also to the fact that this segment is characterized by large well-established neighborhoods and the iconic importance of owning a legacy luxury home. Buyers are less interested in short-lived market movements and want properties that meet the distinguishing features of scarcity and good quality. Taking these factors into consideration, we are sure that well-constructed luxury homes will continue to hold strong positions among prospective buyers.”
Mr. Aakash Patel, Director, Atul Projects
“The RBI’s announcement to increase the repo rate by 25 basis points to 5.50% will increase borrowing costs for buyers in the housing market, especially those relying upon housing finance. At the same time, the upward revision of the FY27 GDP growth projection from 6.7% to 7.1% can serve as a positive sign of the economy’s strength and help improve faith in income and employment. With an inflation forecast of around 5.2%, customers will pay more attention to overall affordability and value, factors such as location, quality features, functionality and long-run appreciation will become even more relevant in their decision-making process. For the residential industry, this means that customers will display a tendency toward informed and value-based demand instead of a generalized decline in activity.”
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