1 day ago
Rate Hike Pressures Affordable Buyers as Luxury Housing Holds Firm
The Reserve Bank of India raised its key interest rate.
This could make home loans more expensive and increase monthly payments.
That may make it harder for people shopping for lower-cost homes to buy.
Some buyers may wait or reconsider their budgets.
A real estate industry leader said the festive season and strong interest in homeownership could help limit the effect.
Another analyst said recent price rises have already made homes less affordable in major cities.
Luxury homes may be less affected because their buyers are generally less sensitive to moderate borrowing-cost changes.
The report says home sales in seven major cities grew in Q3 2026.
The RBI rate hike may raise home-loan EMIs and weigh on affordability, especially for price-sensitive buyers.
NAREDCO chairman Niranjan Hiranandani said higher borrowing costs add to pressure from rising input costs and supply-chain challenges.
NAREDCO President Praveen Jain expects limited market impact, citing buyer sentiment, festive demand and the long-term desire for homeownership.
ANAROCK Group’s Anuj Puri warned buyers may become more selective and take longer to decide, particularly in affordable housing.
In the top seven cities, average residential prices rose 7% year-on-year; about 100,220 homes sold in Q3 2026, with affordable homes representing 16% of sales.
- Who
- Homebuyers and the residential real estate sector; comments were provided by Niranjan Hiranandani, Praveen Jain and Anuj Puri.
- What
- An RBI rate hike may affect housing affordability, with affordable and mid-income buyers more exposed while premium and luxury demand is expected to be more resilient.
- Where
- India, including the top seven cities referenced in the sales data.
- When
- The report discusses the hike ahead of the festive season and gives sales figures for Q3 2026.
- Why
- Higher borrowing costs can increase home-loan EMIs, while housing prices have already risen in major cities.
Limited impact expected
Affordability risks
Effect on festive-season demand
Limited impact expected
Praveen Jain said the market impact should be limited, supported by strong buyer sentiment, festive demand and the long-term desire for homeownership.
Affordability risks
Anuj Puri said higher borrowing costs could make buyers more selective and lengthen decision-making, particularly among price-sensitive purchasers.
Resilience across housing segments
Limited impact expected
Hiranandani said premium and luxury housing should remain relatively resilient because buyers in those segments are generally less sensitive to moderate borrowing-cost changes.
Affordability risks
Puri warned that sharp price rises in major cities have already stretched affordability, leaving affordable buyers more vulnerable to even modest EMI increases.
Key facts
- Rate decision
- The RBI raised its policy rate; the article excerpt does not specify the size of the increase.
- Top-city price change
- Average residential prices across the top seven cities rose 7% year-on-year.
- Home sales
- About 100,220 homes were sold in the top seven cities in Q3 2026.
- Sales growth
- Sales rose 3% year-on-year and 10% sequentially.
- Affordable share
- Affordable housing accounted for 16% of sales.
- Potential buyer response
- Price-sensitive buyers may defer purchases, recalculate budgets or take longer to decide.
- Luxury segment
- Hiranandani said premium and luxury housing is expected to remain relatively resilient.
Quotes
Hiranandani
NAREDCO chairman commenting on housing demand
“Premium and luxury housing, driven by end-users, HNIs and NRIs, is expected to remain relatively resilient, as buyers in this segment are generally less sensitive to moderate changes in borrowing costs and continue to value larger homes, better lifestyles and trusted brands.”
businesstoday.in
“Residential prices in the top seven cities have already risen significantly, stretching affordability.”
businesstoday.in
Praveen Jain
NAREDCO President
“The festive season is a very important period for the real estate sector, and stability in interest rates during this period remains positive for homebuyers.”
businesstoday.in
Sources
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