Indian real estate companies are bracing for a decline in margins in the upcoming quarters, as the recent decision by the central bank to increase interest rates is expected to elevate costs and deter potential buyers from entering the market. Developers, who are already grappling with a slowdown in demand, have chosen not to reduce their pricing strategies, as they strive to maintain profitability despite elevated land costs and stringent funding restrictions. Nevertheless, the rising interest rates may compel these developers to prioritize survival over pride. On June 24th, the Reserve Bank of India took decisive action by raising its key lending rate and the cash reserve requirement by 50 basis points each, as a measure to combat escalating price pressures. With inflation soaring to its highest level in more than 13 years, reaching 11.42 percent in mid-June, the adjustments are significant. In this context, lending rates from banks are projected to approach 13 percent, a level not observed in nearly a decade. Furthermore, interest rates on home loans could increase by 50-100 basis points, making home purchasing less accessible for many middle-class buyers. Ramesh Jogani, managing director at India REIT Fund Advisors, commented, "Real estate prices had already started slackening, this move will lead to more slowdown. We foresee a 15-20% dip in prices." Analysts are increasingly concerned about the waning demand, which is affecting future revenue expectations; this is evident in the performance of real estate stocks, many of which are nearing their lowest values in a year and are down 40-60% from their peaks. In a research note, UBS Investment remarked, "In the near term, we think affordability will be a bigger driver and a 20% correction in property prices will be needed by the year-end to revive volumes."