As the Reserve Bank of India’s Monetary Policy Committee (MPC) concludes its policy meeting on April 8, 2026, against the backdrop of escalating tensions in West Asia, India’s real estate sector remains divided between expectations of a rate cut and a strong preference for policy stability. The central bank has kept the repo rate unchanged at 5.25 per cent since its last cut in December 2025, even as affordable housing demand shows signs of softening.
Industry leaders largely agree that global uncertainties—particularly rising crude prices and inflation risks triggered by the West Asia conflict—could limit the central bank’s room for aggressive monetary easing. Several stakeholders indicated that maintaining a steady interest rate regime may be the most prudent approach in the current environment.
Global Risks Weigh On Rate Cut Outlook
Umesh Gowda H A, chairman and founder of Sanjeevini Group, expects the RBI to hold rates while closely tracking geopolitical developments. He noted that while housing demand remains resilient, prolonged conflict could push developers to adopt a cautious stance, prioritising execution over expansion.
Echoing similar concerns, Ankur Jalan, CEO of Golden Growth Fund, said investor-driven housing markets are already showing signs of moderation. He added that uncertainty may shift investor preference towards structured financial instruments such as alternative investment funds, potentially reducing direct participation in physical real estate.
Lalit Parihar, managing director of Aaiji Group, also backed a status quo stance, citing heightened uncertainties. He pointed out that investors may increasingly favour safer assets like plotted developments, which are less sensitive to interest rate fluctuations.
Realty Sector Backs Stability Amid Uncertainty
Sanjay Sharma, Director at SKA Group, underlined that the primary risks are global rather than domestic. According to him, steady rates would help maintain residential demand momentum, as buyers are currently more influenced by broader macroeconomic conditions than borrowing costs alone.
Preksha Singh, CEO of Agrasheel Infra, stressed that continuity in policy would be more beneficial than incremental rate changes. She said a stable repo rate provides clarity on EMIs, particularly for first-time homebuyers, thereby supporting decision-making and demand.
Amrita Gupta, Director at Manglam Group, also expects the RBI to maintain status quo, highlighting that stability in interest rates is crucial to sustaining homebuyer sentiment amid persistent input cost pressures.
Affordable Housing Demand Shows Signs Of Stress
However, a section of the industry continues to advocate for a rate cut to revive demand, particularly in the affordable housing segment, which has recently shown signs of stress.
Ramani Sastri, Chairman and MD of Sterling Developers, said a rate cut would significantly boost affordability and investor sentiment while reinforcing confidence in the broader economy. He added that a supportive monetary stance could accelerate the sector’s growth trajectory.
Manas Mehrotra, Founder of 315Work Avenue, noted that lower borrowing costs would benefit commercial real estate by supporting leasing momentum and investment activity. He also highlighted the RBI’s earlier move to allow Real Estate Investment Trusts (REITs) to borrow directly from banks as a positive step for the sector.
Manik Malik, CEO and President of BPTP, said easing interest rates would enhance liquidity, improve home loan accessibility, and strengthen demand across segments. He added that favourable macroeconomic indicators, including controlled inflation and strong GDP growth, create room for calibrated easing.
Rajat Bokolia, CEO of Newstone, expects either a status quo or a mildly accommodative stance from the RBI. He said stable or lower rates would improve affordability in mid-income and affordable housing segments, while also easing developers’ financing costs.
Overall, while the real estate sector acknowledges the benefits of lower interest rates, the prevailing sentiment leans towards stability as the RBI navigates a complex global environment. With affordable housing under pressure and geopolitical risks intensifying, the upcoming policy decision is expected to strike a balance between growth support and macroeconomic caution. |
