According to experts, developers, investors and homebuyers benefit from steady borrowing costs, improved planning visibility and sustained confidence across residential, commercial and mixed-use projects.
The Reserve Bank of India on February 6, 2026, kept the repo rate unchanged at 5.25 per cent, opting to maintain a neutral policy stance amid easing inflationary pressures and a strong growth outlook. The pause comes after a cumulative 125 bps reduction in policy rates throughout 2025, underlining the central bank’s intent to allow the impact of earlier easing to fully transmit into the economy. With headline inflation remaining within the RBI’s comfort band and GDP growth holding firm despite global headwinds, the decision reflects a calibrated approach. It balances domestic macro stability against external uncertainties ranging from volatile commodity prices to tightening global financial conditions.
Coming after the Union Budget 2026–27, which emphasised higher government spending and infrastructure-led growth, this move signals continuity in monetary policy and provides developers, investors, and homebuyers with a predictable environment for planning and decision-making.
What it Means for the Real Estate
For the real estate sector, the RBI’s decision offers continuity rather than a fresh trigger. With the repo rate unchanged, borrowing costs for homebuyers and developers remain stable, keeping home loan EMIs predictable and reducing financing-related hesitation among buyers in a credit-sensitive market. The cumulative rate cuts delivered through 2025 have already eased liquidity conditions, and the pause is seen as allowing these benefits to fully percolate, supporting steady housing demand and aiding developers in planning launches and capital allocation with greater certainty.
“Following the budget’s emphasis on infrastructural development and the two trade deals, the RBI’s decision to keep the repo rate unchanged comes as further good news. It speaks of India’s solid economic foundations, easing inflationary pressures and positive growth outlook. Together, they create an effective backdrop for real estate growth. We are confident that 2026 will be another growth-oriented year for the sector,” Deepak Kapoor, Director, Gulshan Group, said.
Industry stakeholders note that rate stability also underpins confidence in long-gestation residential, commercial and infrastructure-linked projects, aligning with the government’s broader urban development push. However, the absence of a further cut is unlikely to significantly alter affordability dynamics in the near term, particularly in the mid-income and affordable segments, where players continue to flag the need for supportive fiscal measures to meaningfully revive demand.
According to Harinder Singh Hora, Founder Chairman, Reach Group, keeping the repo rate stable at 5.25 per cent is a positive signal for the real estate sector, particularly for commercial and mixed-use developments.
To improve planned capital allocation efficiency
“Predictable and stable borrowing costs improve planned capital allocation efficiency for developers, investors and enhance expansion confidence among occupiers and retailers. In markets like NCR, this creates a supportive environment where investment in income yielding asset is accelerated, which leads to an enhancement in Commercial real estate leasing activity as financing pressures ease and business confidence improves. Over the medium term, such policy direction supports steadier absorption, healthier lease closures, and sustained investor interest across retail and office segments,” Hora added.
Preksha Singh, CEO of Agrasheel Infratech, said, “The RBI’s accommodative stance on interest rates is a constructive signal for infrastructure-led growth, particularly in emerging temple towns and high-potential Tier 2 and Tier 3 cities. Improved credit availability and softer borrowing costs will accelerate on ground execution of urban infrastructure, housing, and mixed-use developments in these regions. For markets anchored in cultural, religious, and regional economic significance, this move strengthens end-user confidence and enables developers to plan long-term, sustainable projects with greater financial discipline. This is an opportunity to deepen our focus on region-centric infrastructure that balances growth with heritage-led urbanisation.”
Moreover, as per PropTiger’s latest annual report, “Real Insight – Residential CY 2025”, India’s residential real estate market appears to have decisively exited its post-pandemic surge phase, with housing price growth across the top eight cities slowing sharply to 6 per cent in calendar year 2025, from a steep 17 per cent rise in 2024. The slump in price growth reflects a maturing market characterised by calibrated supply, disciplined pricing, and a gradual softening in transaction volumes after two years of exceptionally strong momentum.
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