Developers expect strong end-user demand and infrastructure-led growth to cushion the impact of higher borrowing costs after the Monetary Policy Committee raised the repo rate to 5.50% from 5.25% on Wednesday, the first increase since February 2023.
“We should not look at repo rate changes in isolation. The timing of the hike, however, comes as the sector enters its busiest sales period. Navratri, Dussehra and Diwali traditionally see increased homebuying activity. Developers believe the underlying demand for homes remains strong, although price-sensitive buyers could take longer to make decisions.
The hike is expected to marginally increase home-loan costs, but developers said the impact should remain manageable for buyers with stable incomes and those purchasing within their affordability limits. Confederation of Real Estate Developers’ Associations of India (CREDAI) president Shekhar Patel said the rate hike may have some impact on festive sales, but home purchases need to be viewed as long-term decisions. What matters is the long-term outlook for the economy and overall growth,” he said.
For NCR’s housing market, the immediate test will therefore be whether the higher cost of borrowing outweighs the traditional festive buying momentum. For now, developers remain confident that strong end-user demand, improving infrastructure and the long-term appeal of homeownership will keep the market on a steady growth path despite the modest rate increase.
