Housing demand will stay strong, say NCR developers after repo rate hike

Home-loan costs are expected to rise after the repo rate hike, but developers see strong festive demand, infrastructure growth and resilient Gurugram housing sales.

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.

The hike is expected to marginally increase home-loan costs

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. “We should not look at repo rate changes in isolation. What matters is the long-term outlook for the economy and overall growth,” he said.

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.

Puri said housing sales in the top seven cities nevertheless remained healthy, with around 1,00,220 units sold in Q3 2026, up 3% year-on-year and 10% quarter-on-quarter. Affordable housing accounted for 16% of these sales. The latest rate increase, he said, could now lead some buyers to recalculate budgets or defer purchases as even a modest rise in EMIs affects affordability.

Gurugram remains a bright spot

In NCR, Gurugram is expected to remain relatively resilient, particularly across premium and luxury housing corridors. Golf Course Road, Golf Course Extension Road, Dwarka Expressway, Southern Peripheral Road, New Gurugram and Sohna Road continue to attract buyers as connectivity and infrastructure improve.

Senior vice-president of Pioneer Urban Land and Infrastructure Rishabh Periwal said the impact of the hike in Gurugram should remain contained, particularly in the luxury segment, where buyers are less sensitive to marginal EMI changes. He also pointed to continued demand for premium commercial space, supported by global capability centre (GCC) expansion.

The broader market is being supported by infrastructure projects such as the Delhi-Gurugram-Jaipur Expressway, Dwarka Expressway and Sohna Elevated Road, along with proximity to Indira Gandhi International Airport, the Delhi-Mumbai Industrial Corridor and planned Namo Bharat connectivity.

Hero Realty CEO Rohit Kishore said, “While the move may add some pressure to borrowing costs, we expect the impact to be manageable as homebuyers continue to prioritise the need for better homes and long-term value. With underlying demand remaining healthy.”

Developers also expect festive offers and flexible payment plans to absorb part of the additional financing burden. Nimbus Group CEO Sahil Agarwal said healthy demand, improving consumer confidence and sustained interest in quality residential and plotted developments would continue to support the sector.

For the broader real estate market, the impact is expected to be uneven. While residential buyers—especially in affordable and mid-income segments—could become more cautious, commercial real estate is likely to remain supported by structural demand from GCCs, technology and BFSI occupiers. Retail, however, could face some near-term pressure if higher financing costs coincide with weaker festive consumption.

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.