News: RBI holds repo rate at 5.25 per cent; property industry welcomes stability but flags affordability and REIT lending plan-06-02-2026
The Reserve Bank of India kept its benchmark rate unchanged on February 6, a move expected to bring predictability to borrowing costs and support homebuyer confidence. Some real estate experts said the pause helps new borrowers plan purchases with more certainty. Others argued that high property prices still strain affordability, especially in affordable and mid-segment housing, and that a cut might have drawn fence-sitters back to the market.
The six-member Monetary Policy Committee voted unanimously to hold the repo rate at 5.25 per cent and retained a neutral stance, signalling the rate is likely to stay on hold for now. The RBI has cut rates by a total of 125 basis points since February 2025, its most aggressive easing cycle since 2019, including 25 basis points in December. The meeting came soon after the Union Budget 2026-27 and the announcement of the India-US trade deal.
The RBI also proposed allowing banks to lend to Real Estate Investment Trusts (REITs) with certain prudential safeguards, to deepen financing for the sector. Governor Sanjay Malhotra announced the proposal. At present banks cannot lend directly to a REIT and can only lend to the underlying special purpose vehicles (SPVs). The change would permit direct bank lending. REITs let individuals invest in large income-generating commercial properties such as offices, malls and warehouses without owning them, earning a share of rental income and any appreciation, with the liquidity of listed shares. India has five listed REITs: Brookfield India Real Estate Trust, Embassy Office Parks REIT, Mindspace Business Parks REIT, Nexus Select Trust and Knowledge Realty Trust. Vijay Agrawal of Equirus Capital said the move may lower REITs’ cost of capital, since bank funding is usually cheaper and longer-term than bond or NBFC financing.
Industry leaders welcomed the pause. Anshuman Magazine, chairman and CEO for India, South-East Asia, the Middle East and Africa at CBRE, said stable rates give developers and investors long-term visibility, helped by low inflation and progress on the India-US trade agreement. Parveen Jain, president of NAREDCO, said the decision will encourage buyers and prompt developers to launch new projects. Shekhar G Patel, president of CREDAI, said predictable financing costs are essential for demand and investment sentiment. Samantak Das, chief economist and head of research and REIS at JLL India, said stability supports consumer spending, housing demand and business investment.
Ramani Sastri of Sterling Developers said a steady rate environment would sustain residential sales even as the market tilts towards premium housing. Shishir Baijal of Knight Frank India called the hold cautious and stability-focused amid global volatility. He said an additional cut could have lifted sentiment in affordable housing, and expects banks to pass on more of the earlier rate benefits in the coming months. Anurag Mathur, CEO of Savills India, said predictable financing helps developers plan cash flows and launch projects in strong urban markets.
Anuj Puri, chairman of ANAROCK Group, said unchanged EMIs spare current borrowers any shock and let new borrowers plan with certainty, but do nothing to lift demand further. He noted that high prices still weigh on affordability, and that a cut could have brought some fence-sitters back. According to ANAROCK Research, affordable housing made up just 18 per cent of total sales in major cities in 2025, down from 20 per cent in 2024 and 38 per cent in 2019.
