With the RBI holding the repo rate steady at 5.5% and recent GST cuts on construction inputs, both homebuyers and developers are entering the market with renewed confidence.
From Jaipur’s tier-II residential hubs to Goa’s holiday homes, developers are optimistic that stable borrowing costs and improved affordability will translate into heightened sales and project activity during the festive quarter.
The Reserve Bank of India’s (RBI) decision to maintain the repo rate at 5.5% in its October 2025 policy review has been welcomed by real estate leaders.
Developers believe the policy stability, combined with recent GST cuts on construction inputs, will enhance homebuyer confidence and create a favorable environment for housing demand across both metros and emerging markets.
Policy Stability Meets Festive Demand
The festive quarter has traditionally been a catalyst for home buying in India. With steady borrowing costs and predictable EMIs, buyers are expected to take advantage of the positive sentiment.
Mohit Goel, Managing Director, Omaxe Ltd, said the central bank’s stance comes at the right time. “The RBI’s decision to maintain policy stability at the onset of the festive season is a timely and growth-supportive move. This period has always been a catalyst for homebuying decisions, and steady interest rates will further strengthen consumer confidence and purchasing power,” he explained.
Goel also highlighted the role of recent GST rationalisation. “Together, these policy measures create a conducive environment for housing demand, particularly in tier-II and tier-III cities where value sensitivity drives decisions. We expect the festive quarter to witness strong traction across residential segments as buyers look to capitalise on favourable market conditions and long-term growth prospects,” he added.
Tier-II and Tier-III Cities in Focus
Beyond metro markets, smaller cities are expected to benefit significantly from the supportive policy backdrop. Developers believe affordability, coupled with aspirational demand, will drive sales momentum.
Amrita Gupta, Director, Manglam Group, said the RBI’s decision provides a much-needed sense of continuity.
“The RBI’s decision to hold the repo rate steady at 5.5% provides a strong signal of stability, reinforcing confidence in India’s real estate sector. As the economy continues to show resilience and positive momentum, this festive season brings with it renewed optimism for homebuyers,” she said.
She noted that emerging cities are particularly well-positioned. “Coupled with recent GST benefits, this stable policy backdrop is inspiring demand across tier 2 and 3 markets, particularly in Jaipur, where buyers are seeking affordability, aspirational living, and long-term value creation. At Manglam, we believe this confluence of festive sentiment, supportive policy measures, and the rising growth of emerging cities will accelerate sustainable urbanisation and further strengthen India’s real estate growth story,” Gupta added.
Second Homes Gain Momentum
Alongside primary housing, the holiday home and second-home markets are also benefiting from the RBI’s steady stance. Rising interest from NRIs and affluent domestic buyers is fueling investments in lifestyle-driven properties.
Aditya Kushwaha, CEO and Director, Axis Ecorp, said the stable rate regime is reassuring for investors eyeing holiday homes.
“This year has seen strong momentum in the real estate market, with buyers increasingly confident about investing, and the current economic environment continues to support informed investment decisions. The RBI’s decision to hold rates reflects a cautious but steady approach, which is reassuring for buyers in the middle of the festive season,” he said.
Kushwaha pointed out that the holiday home market, especially in destinations like Goa, is seeing robust demand. “Stability in monetary policy keeps sentiment positive for holiday homes, where both NRIs and domestic buyers are showing strong interest. Along with the recent GST concessions on construction inputs, it creates an environment where second homes remain attractive as both lifestyle and long-term investment assets. We see this as a window where second homes, especially in markets like Goa, will attract more decisive investments,” he noted.
Outlook: Building Momentum into 2026
With stable interest rates, GST relief, festive season demand, and growing appetite for both first and second homes, the real estate sector is expected to witness sustained momentum in the months ahead. Developers anticipate that both emerging cities and luxury markets will see robust traction, setting the stage for a strong close to 2025 and a positive outlook for 2026.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
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