Realty Stocks Rise Up To 4% After RBI Keeps Repo Rate Unchanged

Real estate stocks rallied on Wednesday after the Reserve Bank of India (RBI) kept the benchmark repo rate unchanged for the fourth consecutive monetary policy review, easing concerns over borrowing costs and lifting sentiment across the sector.

The Nifty Realty index rose as much as 2.7%, making it one of the top-performing sectoral indices on the NSE. The rally came after the sector had declined up to 2.5% in the previous session, with eight of its 10 constituents trading in positive territory following the policy announcement.

The six-member Monetary Policy Committee (MPC), chaired by RBI Governor Sanjay Malhotra, unanimously voted to retain the repo rate at 5.25% while maintaining its "neutral" policy stance. Stable interest rates are generally viewed as positive for the real estate sector as they provide certainty over home loan costs for buyers and financing costs for developers.

Godrej Properties led the gains, rising 4.3%, while DLF advanced 2.04% and Oberoi Realty climbed 1.95%. Prestige Estates Projects, Sobha and Lodha Developers also traded higher, gaining between 0.6% and 2%.

Industry Sees Stability, Awaits Demand Revival

Aman Gupta, Director of RPS Group, said the policy pause was supportive for the sector, particularly as it removed uncertainty around borrowing costs.

"In luxury and commercial real estate, the repo rate hold is almost beside the point, as buyers are more focused on capital appreciation and rental yields. However, stable rates should continue to support NRI investments in Indian real estate. Developers, though, need to monitor inflation closely as any sustained rise could prompt a more hawkish policy stance in future," he said.

Siddharth Maurya, Managing Director of Vibhavangal Anukulkara, said the status quo offers stability but does little to improve affordability for first-time homebuyers.

"A rate hold is better than a hike, but 5.25% remains elevated for buyers in the affordable housing segment. Developers targeting this category may need to offer flexible payment plans to support demand until borrowing costs ease," he said.

Anil Pharande, Founder and Chairman of Pharande Spaces, said the unchanged rates would help sustain homebuyer confidence during the festive season.

"With no increase in EMIs, buyers in the affordable and mid-income segments are likely to remain confident. However, developers will still need to manage rising input costs carefully to preserve affordability without passing on the entire burden to customers," he added.