MPC Keeps Rate Unchanged Amid Tariff Turmoil - Here's What Experts Predict

Indian real estate sector weathers unrelenting turbulence as the sentiment is pressured by Trump’s new 25 percent tariffs hikes and a notable 20 percent plunge in housing sales across top metros, as per the latest ANAROCK report. 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.

The RBI has decided to keep the repo rates unchanged at 5.5 percent, also taking cognizance of the ongoing tariff uncertainties and the possible impact on the Indian economy.

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.

ANAROCK data shows that average residential prices across the top 7 cities combined have increased by 39 percent 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.

Also Read: Big Relief for Homebuyers! RBI Cuts Repo Rate by 50 bps and CRR by 100 bps

That said, overall, homebuyers are currently driven by long-term confidence rather than short-term rate fluctuations. Given the upcoming festive season, developers may look to keep the market momentum going with offers and flexible payment plans, which may help improve affordability for many genuine buyers.

Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd.

The RBI's decision to hold repo rates at its current level reflects a steady approach to supporting economic recovery amid stable inflation. With borrowing costs significantly reduced following three consecutive rate cuts, the current policy stance ensures continued affordability, as rates remain at comfortable levels. This is expected to sustain consumer confidence and support ongoing momentum in key sectors, including real estate.

The unchanged policy stance is set to keep the real estate sector's growth momentum on track. With steady interest rates and strong consumer confidence, developers are expected to meet the sustained demand for quality housing through greater focus on new offerings. This sustained activity will further strengthen the real estate sector’s contribution to GDP growth, job creation, and the expansion of urban infrastructure in the coming quarters.

Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation

The RBI’s decision to keep the repo rate unchanged reflects a balanced approach amid ongoing global uncertainties. While a rate cut—as the real estate sector at large was hoping for—would have further accelerated the demand for homes across segments, borrowing costs continue to remain at relatively accommodative levels, supported by the cumulative 100 basis points reduction earlier this year. As a result, the growth of the housing market will likely continue on its upward trajectory.

With the festive season approaching, stable interest rates and the continued transmission of past rate cuts are expected to keep housing demand buoyant—particularly in the mid and premium segments. Backed by a positive buyer outlook and attractive developer offerings, market sentiment remains strong, and we anticipate steady sales momentum in the months ahead.