The Monetary Policy Committee’s widely anticipated decision to keep interest rates unchanged is a prudent and measured step. This along with a neutral monetary stance sends a strong signal of economic stability, which is vital for core sectors of the country. This move supports steady financing conditions, enabling businesses to focus on executing large-scale infrastructure projects and advancing renewable energy investments. Predictable borrowing costs are essential for fostering growth and innovation in these capital-intensive sectors. As India continues to push for sustainable development and improved infrastructure, the RBI’s policy ensures that the momentum in these sectors remains uninterrupted, contributing significantly to the nation’s long-term economic goals.
Here is what the industry had to say:
Manoj Gaur, CMD of Gaurs Group and chairman of CREDAI National, says, “We once again applaud the RBI move to keep the repo rate unchanged. Given that retail inflation climbed to 6.21% in October, surpassing the RBI’s target range for the first time in a year, the decision by MPC to maintain the status quo on the repo rate is a welcome move. The move showcases the central bank’s commitment to bolster growth, which ultimately will also benefit the real estate sector. The sector is doing good all over the country and this move will definitely keep the bull run continue in real estate.”
Pradeep Aggarwal, founder & chairman, Signature Global (India), says, “The apex bank’s decision to maintain the repo rate at 6.5% reflects a balanced and prudent approach to sustaining economic stability while fostering growth. This continuity provides a stable environment for the real estate sector, enabling developers to plan with confidence and homebuyers to benefit from favorable borrowing costs. However, a rate cut in the future could infuse much-needed liquidity into the real estate sector, accelerating growth and enhancing accessibility for buyers. As India continues to experience robust economic activity, this stable monetary stance will act as a catalyst for long-term growth and investment across industries.”
Kushagra Ansal, director Ansal Housing, says, “The RBI’s decision to maintain the repo rate at 6.5% is a commendable move for the real estate sector. With the economy demonstrating strong performance, supported by robust GDP growth and controlled inflation, the sector is poised for continued success.”
Uddhav Poddar, CMD, Bhumika Group, adds, “While the RBI’s decision to maintain the status quo shows stability, the real estate industry would definitely benefit from a rate cut as the repo rate influences housing affordability and loan repayment terms, which is directly connected to the real estate sectors momentum.”
Boman Irani, president, CREDAI National, says, “Acknowledging the challenges posed by persistent inflationary pressures, the Reserve Bank of India’s decision to maintain the repo rate at 6.5% reflects an understandable approach towards striking a balance between economic and price stability. However, going ahead into the new year, we hope to see the RBI and the government continue to leverage the robust growth and potential offered by real estate and agriculture sectors in particular, via a combination of policy interventions and reduced rates to form a conducive eco-system for sustained and sustainable economic growth.”
Dhanpat Nahata, managing partner, Essar Capital, says, “The RBI’s decision to maintain the repo rate at 6.5% for the 11th consecutive time and reduce the Cash Reserve Ratio (CRR) from 4.5% to 4% is a timely and strategic move. Amidst heightened global uncertainties, rising energy costs, and fluctuating commodity markets, this monetary policy stance ensures financial stability and enhances domestic liquidity. The reduction in CRR might inject additional funds into the banking system, encouraging banks to lend more to corporates, particularly in critical sectors such as energy and infrastructure.”
Anurag Mathur, CEO, Savills India, says, “The Monetary Policy Committee (MPC) of the RBI continued with the ‘neutral’ policy stance while keeping the interest rates stable at 6.5%, leading to a rate pause for the eleventh consecutive time. This rate pause aligns with concerns about high inflation levels and slowing GDP growth. Due to food inflation pressures, the retail inflation for October 2024 was recorded at 6.2%, above the RBI’s tolerance zone of 6%. Concurrently, India’s GDP growth slowed to 5.4% in July-September quarter 2024, well below the RBI’s earlier forecast of 7%. The RBI projected inflation to be 4.8% in the FY2024-2025 and has lowered growth forecast to 4.5% for January-March quarter 2025. RBI has chosen a prudent path in not letting inflation run out of hand. Housing sales have remained healthy in 2024 and will likely maintain the momentum. In the coming year, we expect the government’s focus on maintaining price stability and economic growth to drive future decisions on repo rates and make them more amenable that will match the real estate industry expectations and will augur well to drive demand in the residential sector.”
Sunil Sisodiya, founder, Geetanjali Homestate, says, “The RBI’s decision to maintain the repo rate at 6.5% provides stability to the real estate sector, particularly for developers navigating a challenging market. Over the past year, housing prices in major cities have surged by 23%, creating pressure on affordability. However, the RBI’s steady approach prevents further escalation of borrowing costs, giving developers the confidence to proceed with large-scale projects without the added burden of rising interest rates. This stability is crucial as the real estate sector plays a key role in India’s economy, contributing around 7% to GDP. While the increase in property prices remains a concern for buyers, developers can continue to plan ahead, knowing that interest rates will not increase in the near term. The RBI’s move thus supports both ongoing construction activities and future investment in the sector.”
Dr Nitesh Kumar, MD & CEO, Emami Realty, says, “RBI’s decision to keep the repo rate unchanged at 6.5% was expected, but the cut in the Cash Reserve Ratio (CRR) to 4% is seen as a positive move to improve liquidity in the banking system. While a reduction in the repo rate would have been more beneficial for the real estate sector by lowering borrowing costs, the CRR cut is still a positive move. It will improve liquidity in the banking system, which can indirectly support the housing market by making more funds available for lending This is particularly beneficial for the affordable and mid-segment housing markets, which are highly sensitive to interest rate changes. However, the revision of the GDP growth outlook for FY25 down to 6.6% has raised some concerns but the sector remains hopeful that the improved liquidity and stable interest rates will support steady growth.”
Domnic Romell, president, CREDAI-MCHI, says, “CREDAI-MCHI welcomes the Reserve Bank of India’s decision to maintain the repo rate at 6.5%. This reflects a commitment to economic stability, which is vital for the real estate sector, especially in the Mumbai Metropolitan Region (MMR). Consistency in borrowing costs reassures homebuyers and developers, enabling sustained affordability in a market where financial predictability is key. The stability also supports developers in managing operational costs amidst ongoing inflationary pressures, ensuring that housing remains accessible for buyers. With the new government in Maharashtra under the leadership of Chief Minister Devendra Fadnavis, we look forward to collaborative measures that strengthen housing policies and infrastructure development, aligning with the aspirations of the citizens of Maharashtra.”
Dr. Niranjan Hiranandani, chairman, NAREDCO, states, “The recent RBI monetary policy announcement didn’t deliver the anticipated 0.50 bps repo rate cut, raising significant concerns about India’s economic growth trajectory. A rate cut in CRR will augment the credit lending capacity of banks, making more funding available in the market to enhance business growth. This adjustment retains a confident and optimistic tone while clearly conveying the potential benefits of such a policy change for India’s economic landscape. While the RBI argues that high interest rates help curb food inflation, this view neglects the pivotal supply-side constraints affecting food prices. Though monetary policy influences demand, it is supply-side factors that substantially drive food inflation. A strategic reduction in interest rates could have stimulated sustainable GDP growth while addressing inflation through supply-side measures.”
Shraddha Kedia-Agarwal, director, Transcon Developers, says, “An unchanged repo rate allows the market to sustain its momentum, particularly in metro cities where housing demand continues to rise. The policy’s stability is a boon for luxury housing, enabling developers to plan innovative projects without the pressure of fluctuating interest rates. We hope to see further incentives to accelerate urban infrastructure development.”
Rohan Khatau, director, CCI Projects, says, “The neutral stance taken by the RBI ensures predictability in the market, which is critical for sustaining homebuyer confidence. While the steady repo rate is encouraging, we also look forward to policies that could ease liquidity challenges and promote faster approvals for real estate projects.”
