News: Unchanged repo rate seen steadying home loan EMIs and easing planning for developers-05-06-2026
The Reserve Bank of India has left the repo rate at 5.25% for a second straight policy review, a move seen as bringing stability to homebuyers and developers at a time of the West Asia crisis and inflation worries. Steady borrowing costs should keep EMIs unchanged and support affordability and housing demand, while giving developers more certainty for financial planning, cash flow and timely delivery. Experts said a weaker rupee and high energy prices could still push up project costs through imported materials and supply chain disruption.
Parveen Jain, President of NAREDCO, called the decision positive for the economy and the sector, saying it would maintain market stability and consumer confidence. He said buyers face no extra burden on loan repayments, which should help mid-income and affordable housing demand. CREDAI president Shekhar Patel expected demand in the mid-income and premium segments to stay resilient, and said continued policy support is needed to narrow the affordable housing demand-supply gap.
Raoul Kapoor, Co-CEO of Andromeda Sales and Distribution Pvt. Ltd, said existing borrowers will see no immediate EMI increase, helping households plan expenses. Aman Sarin, Director and CEO of Anant Raj Limited, said stable rates matter given the pressure on input costs from the West Asia crisis, and that for many buyers affordability is about certainty in monthly payments as much as lower rates.
Anuj Puri, Chairman of ANAROCK Group, said the war in the Middle East is pushing up global oil prices and domestic construction costs, and has led many Middle Eastern investors to pause purchases in Indian property. With rates constant, he said, the market is not hit by rising loan costs on top of material costs. Shishir Baijal, Chairman and Managing Director of Knight Frank India, said stability is vital for residential demand, and that steady rates should help offset any cost increase from a weaker rupee. Manik Malik, CEO and president of BPTP, said stable rates can sustain momentum in the mid and premium segments.
Others were more cautious. Lata Pillai, senior managing director and head of capital markets at JLL India, called the status quo positive for now, but said developers may pass higher input costs to buyers, hurting the mid-segment as higher-priced housing stays buoyant, and that weaker stock market returns and uncertainty could affect sentiment. Vimal Nadar, National Director and Head of Research at Colliers India, said material and labour costs are already rising and may lead to workforce shortages and delays, with costs eventually passed on to buyers, especially in affordable and mid-income housing. He added that a rate increase in the next few quarters cannot be ruled out. Buyers are likely to assess income visibility more strictly, while developers focus on material availability, cash flow and execution.
