2 days ago
RBI's status quo to boost affordable housing segment
Hyderabad: The Reserve Bank of India (RBI) has decided to keep the repo rates unchanged at 5.5 per cent, also taking cognizance of the ongoing tariff uncertainties and the possible impact on the Indian economy.
Indian real estate weathers unrelenting turbulence as the sentiment is pressured by Trump's new 25 per cent tariffs and a notable 20 per cent plunge in housing sales across top metros, as per the latest international property consultant Anarock.
In Q2 2025 alone, just 96,285 homes were sold, a steep fall from 120,335 a year ago, indicating increasing buyer hesitancy and market uncertainty. Amid these headwinds, the central bank's policy choices come with high relevance to initiate a turnaround and arrest further market deterioration.
Jagannath Rao Bandari, President-Elect, Credai Hyderabad, adds that 'the RBI's decision to hold the repo rate at 5.5% reflects a prudent approach that supports stability in Hyderabad's real estate sector. While a 0.5% reduction could have further boosted homebuyer interest, the current steady stance fosters confidence among developers and investors. To accelerate housing demand, stakeholders should focus on innovative financing solutions and government incentives to enhance affordability and promote inclusive growth in Hyderabad's dynamic market.'
Anarock data shows that average residential prices across the top seven cities combined have increased by 39 per cent in the last two years alone – from Rs 6,470 per sq ft as of Q2 2023 to Rs 8,990 per sq ft as of Q2 2025.
The affordable housing segment's fate may be further dampened by the ongoing global trade tensions and tariffs imposed by the Trump administration. This is largely because of its impact on the MSMEs – the key target audience of the affordable segment.
'A rate cut leading to lower interest rate environment would have particularly boosted the affordable housing segment, which has been under considerable pressure in recent years,' said Anuj Puri, Chairman of Anarock Group.
He said, 'Homebuyers are currently driven by long-term confidence rather than short-term rate fluctuations. During this festive season, developers may look to keep the market momentum going with offers and flexible payment plans, which may help improve affordability for many buyers.'
