CREDAI and NAREDCO Urge RBI to Cut Repo Rate Below 5.5% to Boost Affordable Housing Demand

The real estate sector is once again looking toward the Reserve Bank of India (RBI) for policy support as CREDAI and NAREDCO, the two largest developers’ associations, have jointly urged the central bank to reduce the repo rate below the current 5.5%. The call comes amid a need to stimulate demand in the residential housing segment, particularly for affordable homes.

While the RBI maintained key interest rates at 5.5% during its latest monetary policy review, industry leaders believe that a reduction in the repo rate would bolster buyer confidence and incentivize home purchases. CREDAI National President Shekhar Patel highlighted that predictable borrowing costs provide stability to both homebuyers and developers, enabling long-term planning and smooth project financing. He also pointed out that recent GST rationalizations have already contributed to improved consumer sentiment across sectors.

NAREDCO National President G Hari Babu emphasized that alongside India’s projected real GDP growth of 6.8%, a repo rate cut would further energize the real estate market. Lower interest rates are expected to strengthen affordable housing sales, increase overall residential demand, and provide a boost to allied sectors such as cement, steel, electricals, piping, and interior design.

The associations also stressed the importance of banks passing on the benefits of earlier rate cuts to both existing and new home loan borrowers. With housing sales across top seven cities remaining lower compared to last year, largely due to high base effects and rising property prices, timely monetary policy support could prove critical.

CREDAI and NAREDCO represent more than 15,000 developers nationwide, underscoring the breadth of the sector’s demand for supportive measures. As India approaches the festive season, industry leaders are hopeful that strategic repo rate cuts, coupled with consistent policy continuity, will provide much-needed momentum to the residential real estate market and ensure sustained growth for developers and buyers alike.