7 Bold RBI Moves Real Estate Urgently Hopes For

RBI Monetary Policy is once again in the spotlight as India’s real estate sector voices its wishlist amid a visible slowdown in residential property sales. With the Reserve Bank of India set to announce its next policy stance, developers and industry leaders are keenly watching for signs of support—especially in the form of rate cuts or reforms that could ease liquidity and revive homebuyer sentiment.

As the Indian housing market experiences signs of fatigue after a record-breaking run in recent years, developers are now urging the central bank to act decisively. Here’s a look at what the real estate sector expects from the upcoming RBI Monetary Policy, and why these reforms could be critical at this juncture.

Residential Sales Are Slowing: A Warning Sign

While the post-pandemic boom saw property sales surge across major Indian cities, the past two quarters have raised alarms. High interest rates, rising property prices, and inflationary pressures have dampened affordability for the middle-income segment. According to several real estate consultancies, Tier-1 city housing demand has slowed, with booking rates dipping and unsold inventory rising in select micro-markets.

Experts note that while luxury and premium homes continue to see demand from high-net-worth individuals (HNIs) and NRIs, the mass housing segment—particularly affordable and mid-range homes—is under pressure.

What the Real Estate Sector Wants from the RBI Monetary Policy

Industry leaders have outlined a series of expectations they hope will be met in the next RBI Monetary Policy meeting. These expectations stem from the need to keep the housing market afloat and improve affordability for homebuyers. Here are seven key reforms on the sector’s wishlist:

1. Reduction in Repo Rate

The top priority on the wishlist is a cut in the repo rate. Currently at 6.50%, unchanged since February 2023, the rate directly affects home loan interest. Developers argue that even a small reduction could revive buyer interest by lowering EMIs, particularly for first-time homebuyers.

2. Incentives for Affordable Housing

Developers want more incentives for the affordable housing segment. This includes interest subvention schemes and tax benefits. A revival in this segment is crucial as it forms the largest part of urban demand.

3. Liquidity Support for Developers

Developers facing cash flow crunches due to unsold inventory and stalled approvals are asking the RBI for steps to boost liquidity. This includes allowing NBFCs and banks to lend more freely to real estate developers, especially those with a good track record.

4. Reintroduction of Credit Linked Subsidy Scheme (CLSS)

The industry is also pushing for the reintroduction of the CLSS under PMAY (Pradhan Mantri Awas Yojana) for middle-income groups. This was a crucial scheme that provided direct interest subsidy and significantly boosted demand during the pandemic years.

5. Rationalisation of GST on Under-Construction Properties

While this is more of a policy concern, developers want the RBI to support talks on rationalising GST (currently 5% without ITC for under-construction properties). A lower GST rate or restoration of ITC could encourage sales and reduce construction costs.

6. Support for Green and Sustainable Projects

Green housing projects, which contribute to India’s sustainability goals, face higher development costs. Developers are asking for concessional lending or green finance mechanisms, supported by RBI guidelines, to encourage sustainable development.

7. Boosting Home Loan Eligibility Norms

Relaxation of norms around loan-to-value (LTV) ratios, risk weights, and income-to-loan assessment is also being sought. This would make loans more accessible for younger buyers and those in Tier-2 and Tier-3 cities.

Why RBI Is Likely to Stay Cautious

Despite the wishlist, analysts believe the RBI Monetary Policy may remain on hold in the near term. With retail inflation hovering around the RBI’s upper target band and global interest rates still elevated, a rate cut may not be immediate. The central bank is likely to prioritize inflation control and macroeconomic stability over sector-specific demands, at least until the next few quarters.

Industry Voices Call for Balanced Growth

Niranjan Hiranandani, a veteran real estate developer, recently commented that while developers understand the RBI’s inflation concerns, there is also a risk of stalling momentum in one of the economy’s largest employment-generating sectors.

“Real estate is too big to ignore,” he noted. “If housing demand weakens, it can have ripple effects across steel, cement, transport, and jobs. A delicate balance is required between fiscal discipline and sectoral stimulus.”

Real Estate Trends: What the Data Says

• According to ANAROCK, residential sales dipped 7% QoQ in Q1 2025.
• Mumbai and NCR saw the sharpest declines, especially in the ₹50–80 lakh bracket.
• Unsold inventory rose by 5% across top 7 cities.
• Average home loan rates are still above 9%, putting pressure on affordability.

How Developers Are Coping

In response to muted sales, developers are turning to subvention schemes, zero EMI until possession plans, and flexible payment options. Some are even offering homebuyers the chance to “lock-in” interest rates before a purchase is finalized.

There is also a growing push toward co-living, rental housing, and fractional ownership models, which could offer alternative revenue streams and reduce reliance on outright home sales.

The Road Ahead: Hope, But With Caution

The upcoming RBI Monetary Policy announcement holds significant weight for the real estate sector. A supportive stance—either through direct measures or broader economic easing—could inject momentum back into the housing market. However, the sector also needs to innovate, rationalize costs, and refocus on genuine affordability to ensure long-term resilience.

If the RBI manages to strike a fine balance between price stability and growth stimulus, India’s real estate sector may well be poised for its next chapter of sustainable expansion.

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