Real Estate Sector Remains Optimistic Ahead of RBI MPC Outcome

The Reserve Bank of India’s Monetary Policy Committee (MPC) meets every alternate month to assess the country’s macroeconomic conditions and decide on key policy rates aimed at maintaining inflation within target and supporting economic growth. Changes in interest rates directly affect home loan affordability and consumer confidence, particularly for the real estate sector. The housing sector has witnessed renewed momentum following the cumulative 1% reduction in the repo rate between February and June 2025, which has improved affordability and revived buyer sentiment across key markets. With inflation staying well below the RBI’s target, there is still room for a consecutive fourth cut in the repo rate to boost consumption in the economy. A 25-bps cut in the repo rate would give a further boost to the real estate market, as it would bring the repo rate down by 125 bps from the previous year.

Despite the current low-interest rate environment providing strong support to housing demand, it would be important for the RBI to carefully assess overall economic conditions before making a decision. Lower home loan rates always give an impetus to housing demand by improving affordability and encouraging more buyers to enter the market. With inflation remaining below expectations, geopolitical tensions easing, and the domestic economy showing signs of resilience, a moderate 25 basis point cut remains a strong possibility. Vikas Bhasin, MD of Saya Group, is hopeful that the RBI will continue the rate cut cycle and may opt for another reduction of 25-50 basis points in the repo rate in the upcoming MPC meeting.

As the Reserve Bank of India (RBI) prepares to announce the outcome of its latest Monetary Policy Committee (MPC) meeting, the real estate sector is abuzz with optimism. Developers, investors, and homebuyers are closely watching the central bank’s stance, hoping for continued policy support that could sustain the positive momentum the sector has witnessed over the last few quarters. The outcome will significantly impact housing loan EMIs. A stable or reduced repo rate allows banks to offer competitive interest rates, benefiting homebuyers to the (RBI’s Statement,) the central bank is committed to anchoring inflation while supporting economic recovery.

Steady Interest Rates Boost Confidence

The industry expects the RBI to maintain the repo rate at its current level, a move that would be welcomed by developers and homebuyers alike. A pause on rate hikes ensures housing loan EMIs remain stable, encouraging both first-time buyers and upgraders to make purchasing decisions. This stability comes at a time when affordability is still being recalibrated after the recent cycle of rate increases. Read more about how previous MPC decisions impacted the (Real Estate Market).

Residential Market Momentum Continues

The residential real estate segment has shown remarkable resilience, with consistent growth in home sales and new launches, especially in top cities like Mumbai, Pune, Bengaluru, and Hyderabad. Analysts point out that mid-income and premium housing categories have performed strongly, buoyed by end-user demand and investor confidence. Reports from agencies highlighted how developers are realigning their offerings to cater to changing consumer preferences larger homes, better amenities, and flexible payment schemes. The upcoming MPC decision is expected to play a role in sustaining this buyer sentiment.

Commercial and Office Space Outlook

Beyond housing, the commercial real estate sector, particularly office leasing, is also displaying robust signs of recovery. With return-to-office trends gaining traction and hybrid workspaces becoming the norm, leasing activity has picked up in key urban centres. If the RBI signals economic growth in its policy commentary, it could further boost confidence in commercial assets. Major developers and REITs are eyeing increased participation in Grade-A office space, co-working models, and tech park expansions. You can read more about how developers are reshaping office space.

Developer Expectations from RBI

Developers are hopeful the RBI will continue to adopt a balanced monetary policy that fosters economic stability without dampening demand. Some industry bodies have called for further easing of norms for construction finance and faster clearances for real estate projects. For a detailed view of the sector’s policy recommendations. Overall, the mood in the real estate sector is one of cautious optimism. A rate pause or dovish tone from the RBI could serve as a strong signal to both retail buyers and institutional investors that India’s housing market is poised for sustained growth. With inflation appearing to be under control and GDP projections stable, stakeholders are betting that the upcoming RBI announcement will reinforce the sector’s growth trajectory.