The Reserve Bank of India (RBI) will be conducting its next Monetary Policy Committee (MPC) meeting in a very challenging situation. On one hand, the real estate industry is eager to know which way RBI is going to direct the policy, and then again, various macroeconomic factors are at play like global conflicts, fluctuating crude prices, sustained inflationary pressure, and overall world economic uncertainty. Industry players agree that the main issue is not the lack of demand for residential property, the gradual expansion of commercial leasing activity, and the growth in institutional investments, but instead, that these factors don’t call for immediate action on cutting rates; rather a cautious approach is required at this stage of the economic cycle.
Real estate experts in our country have the belief that RBI should stick to the presently fixed repo rate level which in their opinion serves the dual purpose of controlling inflation and safeguarding financial stability besides not dampening the spirit of economic growth. Maintaining low-interest rate conditions gives developers, homebuyers, and investors confidence that their borrowing costs are going to be predictable and it supports their long-term decision making. Besides that, industry experts also say that the RBI’s stance on inflation, liquidity, and future policy direction will remain under the radar as these factors will affect market conditions not only at the residential level but also in commercial real estate as well as for institutions.
Experts Opinions
Mr. Umesh Gowda H A, Chairman and Founder, Sanjeevini Group
“The upcoming RBI Monetary Policy Committee meeting comes at a time when the global economy is grappling with heightened geopolitical tensions, persistent supply chain disruptions and renewed inflationary pressures, particularly due to rising energy prices. In such an environment, we expect the RBI to prioritize macroeconomic stability over monetary easing. While a status quo on the repo rate appears to be the most prudent approach, the central bank’s commentary on inflation and liquidity will be equally important. For the real estate sector, stable interest rates provide certainty to both developers and homebuyers, allowing investment and purchase decisions to continue without disruption. India’s housing market has demonstrated resilience over the past few years, and policy stability will help sustain this momentum despite global uncertainties.”
Mr. Ankur Jalan, CEO, Golden Growth Fund (GGF), a Category II Real Estate Focused Alternative Investment Fund (AIF)
“The upcoming RBI Monetary Policy Committee meeting assumes greater significance amid escalating geopolitical tensions, volatile crude oil prices and persistent inflationary risks. In this environment, we expect the RBI to adopt a cautious and calibrated approach, with a status quo on policy rates being the most likely outcome. For real estate-focused AIFs, macroeconomic stability and policy predictability are more critical than short-term rate movements. A stable interest rate environment supports disciplined capital allocation, sustains investor confidence and enables developers to execute projects without facing abrupt increases in financing costs. India’s real estate sector continues to benefit from strong structural demand, rapid urbanisation and increasing institutional participation. As long as inflation remains under control and financial conditions remain stable, the sector is well-positioned to attract long-term domestic and global capital. We believe a measured policy stance by the RBI will reinforce confidence among investors and further strengthen the investment case for professionally managed real estate assets.”
Mr. Lalit Parihar, Managing Director, Aaiji Group
“Escalating geopolitical conflicts have increased the risk of imported inflation through higher crude oil and commodity prices. In this backdrop, we believe the RBI will remain cautious and maintain its focus on anchoring inflation expectations. While the real estate sector always welcomes lower borrowing costs, preserving economic stability is a larger priority. A measured policy stance will reinforce investor confidence and ensure that financing costs remain predictable. The housing sector today is driven by genuine end-user demand and improved affordability, making it resilient enough to withstand a temporary pause in monetary easing. Once global uncertainties subside, the RBI will have greater flexibility to support growth through calibrated policy measures.”
Mr. Mukesh Choudhary, Managing Director, Accuspace
“The RBI faces the delicate task of balancing economic growth with inflation management amid an increasingly volatile global environment. Given the geopolitical risks and the possibility of elevated inflation, we expect the MPC to adopt a wait-and-watch approach. Such a stance would reassure both domestic and foreign investors who value policy consistency during uncertain times. For the real estate sector, especially commercial assets and institutional investments, predictable interest rates are often more valuable than abrupt policy shifts. A stable monetary environment supports long-term capital deployment, strengthens financing conditions and reinforces India’s position as an attractive real estate investment destination.”
Across the real estate industry, a general understanding that policy stability will be extremely beneficial in the present world environment as contrasted to aggressive monetary easing has developed between different parties involved. Executives within the industry think that preserving the present policy rate and watching closely the developments in prices and availability of funds will probably help keep the market in equilibrium. Also, it will continue attracting investments and give developers an idea of financial forecasting that is more accurate and reliable. Given uncertainties at the world levels, there is a great expectation from the RBI to come up with policies that will be neither rash nor too conservative but rather a balanced one so that the confidence in the Indian real estate will be reinforced and So, its long-term growth will be better supported.
Cover image- Reuters