On June 7, 2024, the Reserve Bank of India (RBI) Monetary Policy Committee (MPC) decided to maintain the repo rate at 6.50%. This marks the eighth consecutive time the repo rate has been kept unchanged, reflecting the RBI’s commitment to economic stability amid global uncertainty and domestic inflation concerns.
For homeowners and potential buyers, this decision means there will be no immediate impact on real estate or home loan EMIs. With the repo rate remaining steady, banks are unlikely to adjust their lending rates soon, keeping EMIs stable for now.
The repo rate, set by the RBI, significantly influences home loan interest rates in India. Interest rate fluctuations affect real estate demand; lower rates generally increase demand by making borrowing more affordable, potentially driving up property prices. By keeping the rate unchanged, the RBI aims to maintain economic stability, making housing more affordable and boosting consumer confidence.
The real estate sector remains hopeful for lower interest rates later this year, which could spur housing demand and drive growth across related industries.
Comments By Industry Expert
Mr. Samir Jasuja the CEO and MD of PropEquity (India’s largest real-estate data and analytics company)
“The decision of RBI is on the expected lines. With overall inflation falling within the RBI range, a policy rate cut may not be very far away. Real estate prices have gone up substantially and a future rate cut will give much higher purchasing power to the customer which is the need of the hour. Such a move would be a welcome news for homebuyers across cities including metro cities as well as tier II and III cities.”
Mr Abhishek Tripathi the Co-founder of Settl
“The real estate sector in India is experiencing a remarkable phase, with demand for quality living spaces increasing significantly. This surge is expected to continue, fueled by technological disruptions and digital transformations. PropTech startups make up less than 5% of the total recognized startups in the country. However, the real estate sector contributes approximately 7-8% to the country’s GDP, and reports suggest it will soon surpass 10%. Given this scenario, we believe the sector will attract substantial investment, including in the startup segment.”
Varun Sharma the Founder & MD of MVN Group
“The RBI’s prudent decision to keep the repo rate unchanged will instill confidence in homebuyers and investors, providing a significant boost to the real estate market by fostering a climate of growth and stability. This move will especially benefit the luxury housing segment, where demand for exclusive high-end properties is set to soar, driving growth not only in metro cities but also in emerging luxury markets across India”
Ashish Agarwal the Director of AU Real estate
“The RBI’s decision to maintain the repo rate unchanged is a thoughtful move that will have a lasting impact on the real estate sector. This stability in interest rates will make homeownership more attainable and affordable for buyers, which in turn will drive demand for luxury housing. As India’s economy continues its upward trajectory, the real estate sector is poised to play a pivotal role, and this repo rate policy will be a crucial catalyst in propelling that growth forward.”
Abhishek Trehan the Executive Director at Trehan Iris
“The RBI’s decision to keep the repo rate at 6.5% is expected to bring stability to the real estate sector, creating a favorable environment for growth. This move aims to bolster the sector’s momentum, potentially increasing demand for housing, especially luxury properties. As India’s economy continues to grow, the real estate sector is positioned to have a significant impact on the country’s development, and the RBI’s repo rate policy will play a crucial role in driving that growth forward.”
Manish Jaiswal the Group COO of Eldeco
“With the RBI maintaining the repo rate at 6.5%, we strongly support this prudent decision by the government. This stability is crucial as it ensures consistent borrowing costs, encouraging more homebuyers and investors into the market. The robust GDP growth projection of 6.5% further boosts our confidence in expanding our projects to meet the increasing demand for residential and commercial spaces.“
Vipin Sharma the Founder & Chairman of Aarize Group
“The Reserve Bank of India has decided to keep the repo rate at 6.5% during its monetary policy, which will benefit the real estate sector. We believe that India’s growth at 8.2% in FY 2023-24 is an outcome of the initiatives made for Viksit Bharat by 2047; the growth trajectory is predicted to continue and strengthen in the future. This stability in loan rates promotes current and future real estate investments, hence improving sector growth. Therefore, we are committed to use this growth boost to meet the increasing demand for residential and commercial spaces.”
Mr Yashank Wason the managing Director of Royal Green Realty
“We hail the decision of RBI MPC meeting to hold the benchmark rate at 6.5 percent for the eighth consecutive policy review. Maintaining the status quo augurs well for India’s growing economy. This move will keep the momentum of real estate going on. Housing sales across the country, including Delhi NCR, have been phenomenal in the last few quarters. The unchanged repo rate will boost the confidence of homebuyers to purchase properties and give breathers to home loan borrowers. The consistent stand of RBI will give stability to the real estate sector and its growth will significantly add traction to the country’s growing GDP and promising future prospects.”
Pradeep Aggarwal the Founder & Chairman of Signature Global (India) Ltd.
“The Reserve Bank of India (RBI) has maintained steady interest rates for the eighth consecutive time, likely influenced by high food inflation despite the overall Consumer Price Index (CPI) remaining within the target range. Provisional GDP growth for FY24 stands at an impressive 8.2%, up from 7% in FY23, further supporting this decision. Additionally, the combined Index of eight core industries (ICI) recorded a provisional growth of 6.2% in April 2024 compared to April 2023, reflecting increased production in key industries.
Economists predict that if inflation continues to decline, rate cuts of 25-50 basis points could be expected in the second half of the fiscal year. Such a reduction in interest rates could significantly boost the real estate sector, which is already benefiting from strong end-user demand. We anticipate this robust demand trend to remain healthy over the coming years, particularly in cities like Gurugram, which are experiencing substantial infrastructure development.”
Mr Santosh Agarwal the CFO and Executive Director
“Alphacorp expressed support for the RBI’s decision to maintain the repo rate at 6.5%, highlighting its role in fostering economic stability essential for real estate growth. This stability aids in managing borrowing costs, benefiting home buyers with predictable loan rates and stable EMIs, thus making homeownership more accessible. Investors can also expect steady returns, boosting confidence in the real estate market. Developers will benefit from stable borrowing costs, enabling efficient project completion and a steady supply of residential and commercial spaces. Going forward, we plan to expand our projects to meet the rising demand. The current monetary policy and economic growth create favourable conditions for ongoing development in construction and real estate, aligning with our goal of providing high-quality spaces that meet customer requirements.”
Ankush Kaul the chief business officer at Ambience Group
“RBI has maintained the repo rate at 6.5 per cent for the last 16 months. This rate has been kept in mind by the real estate sector for a long time. There is a distinct excitement and confidence among potential buyers, which will encourage buyers to invest in both residential and commercial sectors as the festive season approaches.”
Ashwinder R. Singh, Co-Chair of CII’s NR Committee on Real Estate, CEO Residential at Bhartiya Urban, and Author
“The RBI’s decision to maintain the repo rate at 6.50% is a strategically sound move that reinforces stability and confidence in the real estate market. This policy stance not only sustains the current growth trajectory but also enhances affordability for potential homebuyers and commercial real estate investors. By keeping interest rates steady, the RBI ensures that financial burdens on borrowers remain manageable, thereby encouraging more investments and purchases. This is expected to drive positive demand, bolster market sentiment, and support long-term growth in the sector.”
Mr Mohit Jain the Managing Director of Krisumi Corporation
“The demand for homes remains stronger, especially in the luxury and high-end segments. The RBI status quo on the policy front is expected to keep the momentum going. However, with potential rate cuts on the horizon, the entire real estate market could see an additional boost as and when it materializes. The mid and premium housing segments will be the biggest beneficiary of any future rate cut.”
