RBI’s Rate Pause Offers Breathing Room for Realty Sector Amid Rising Costs and Global Uncertainty
By:-Mr Amit Goyal, MD, India Sotheby’s International Realty
The RBI’s decision to hold the repo rate steady at 5.25% is, in my view, a necessary call at a moment of considerable uncertainty. Crude oil prices are rising sharply on the back of prolonged geopolitical tensions in West Asia, rising inflation and climbing construction costs are already showing up in project budgets and delivery timelines. The Central Bank is walking a real tightrope in early 2026.
For the Indian real estate sector, stable borrowing costs are a critical lifeline as they keep home loan EMIs predictable, protect buyer affordability and prevent demand from softening at a time when the market has been showing genuine momentum. Developers too are able to quietly absorb rising input costs. If sustained, it could compress margins, slow new launches, and in some cases, push project timelines.
The RBI’s projection of 6.9% GDP growth for FY27 is reassuring and tells us that India’s macroeconomic foundation remains intact. But with inflation forecasts revised upward to 4.6% and the rupee under pressure from global energy shocks, the operating environment is tightening. The rate pause has bought us valuable breathing room on how effectively the sector uses it will determine how the growth story holds through the rest of the year.
