The Reserve Bank of India (RBI) decided to maintain the repo rate at 6.5% during its 5th bi-monthly meeting for FY25, marking the 11th consecutive pause. The RBI adopted a neutral stance to control inflation while supporting economic growth. Along with this decision, the Cash Reserve Ratio (CRR) was reduced to 4%, injecting INR 1.16 lakh crore into the banking system. Real estate industry leaders welcomed the move, highlighting its positive impact on buyer confidence, home loan rates, and project funding, while urging further government incentives and infrastructure measures.
The Reserve Bank of India (RBI) recently decided to keep the repo rate unchanged at 6.5% during its 5th bi-monthly meeting for FY25, marking the 11th consecutive pause. The RBI's Monetary Policy Committee (MPC) adopted a neutral stance, balancing the need to control inflation while supporting economic growth. Alongside this decision, the Cash Reserve Ratio (CRR) was reduced to 4.0%, which is expected to inject INR 1.16 lakh crore into the banking system, boosting liquidity and providing financial support to the economy.
As part of its economic outlook, the RBI revised its GDP growth forecast for FY25 from 7.2% to 6.6%, while inflation expectations were slightly adjusted from 4.5% to 4.8%. These adjustments reflect a cautious yet proactive approach to managing economic challenges.
Reactions from the real estate sector have been positive, with industry leaders recognising the stability that the RBI's decision brings. Mr. Prashant Sharma, President of NAREDCO Maharashtra, welcomed the unchanged repo rate, noting that it provides much-needed stability to financial markets, which is crucial for the real estate industry. He emphasised that this move would help maintain buyer confidence, especially in the affordable and mid-segment housing markets. However, he also highlighted that further government support, particularly in the form of tax incentives, would be essential to boost housing demand.
Similarly, Jitendra Mehta, President of CREDAI MCHI Thane, pointed out that the decision to maintain the repo rate at 6.5% would continue to make home loans attractive, encouraging homebuyers in Thane. He also mentioned that the reduction in CRR would help banks lend more, benefiting the real estate market further.
Other industry figures, such as Mr. Prashant Khandelwal, CEO of Agami Realty, and Mr. Kuldeep Jain, Founder & CEO of Build Capital, echoed these sentiments, noting that the stability in borrowing costs would foster growth across both residential and commercial real estate markets. With manageable borrowing costs, the real estate sector is expected to see sustained demand and growth in the coming months.
In addition, leaders like Mr. Vikas Sutaria, Founder of Iraah Lifespaces, and Mr. Anil Mutha, Chief Visionary & Co-Founder of Nandivardhan Group, emphasised the need for continued focus on infrastructure development and measures to enhance liquidity. They believe that these efforts are vital to sustaining the momentum in the housing market.
While the RBI's decision has been largely welcomed, industry leaders continue to urge for more targeted measures, such as tax benefits and faster project approvals, to further stimulate growth and ensure that the sector remains on track. The RBI's decision to maintain the repo rate at 6.5%, combined with the reduction in the CRR, brings much-needed stability to the real estate market. As the sector looks to the future, experts are hopeful that further government support will build on this foundation, encouraging continued growth and investment in the housing market.
The RBI's decision to keep the repo rate at 6.5% is seen as a stabilising force for the real estate market, particularly boosting buyer confidence and keeping home loan rates manageable. The reduced CRR is expected to enhance liquidity in the banking system, benefiting the real estate sector. Industry experts anticipate further support from the government in terms of tax benefits, liquidity measures, and infrastructure development to sustain demand. This policy provides stability, which is crucial for the continued growth of the sector.
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