Realtors hail RBI, but the question is: will banks follow repo rate cut with interest rate cuts.
The RBI decision to cut repo rate by 25 basis points likely to buoy the real estate sector with expectations of major banks trimming mortgage rates, says realty sector.
Here are some comments:
Prashant Sharma, President, NAREDCO Maharashtra: The RBI’s decision to cut the repo rate by 25 basis points is a welcome move for the real estate sector, particularly in a high-interest rate environment where homebuyers have been feeling the pinch of rising EMIs. This rate cut will provide much-needed relief to existing and prospective homebuyers, boosting housing demand and enhancing affordability. Additionally, we expect banks to ensure swift transmission of the reduced rates to borrowers, allowing a direct impact on home loan interest rates. The real estate sector has been a key driver of economic growth, and lower borrowing costs will contribute positively to the overall industry sentiment.
Vimal Nadar, Head of Research at Colliers India: In line with expectations, RBI in its first MPC meeting after the Budget, has decided to reduce the repo rate by 25 basis points to 6.25%, the first rate cut in nearly five years, following a prolonged cycle of rate hike and stability triggered by global uncertainties. This comes in the backdrop of easing inflation and moderation in growth prospects. The Central Bank, however, maintains confidence on the robustness of domestic economy and projects the GDP growth rate at 6.7% in FY 2025-26. As housing demand had begun to stabilize after witnessing record sales in the last 2-3 years, this rate cut comes at an opportune time and will have a significant bearing on boosting homebuyer sentiments. The rate cut along with the recent budgetary announcements related to creation of Urban Challenge Fund and tax reliefs under the new regime, are likely to stimulate urban growth and enhance domestic consumption. Higher disposable income and lowering of financing costs stand to benefit homebuyers and developers alike. Furthermore, the recent allocation of INR 15,000 Crores for SWAMIH II fund is likely to expedite completion of stressed projects, boosting liquidity and spur home buying sentiments. Overall, evident tailwinds should boost real estate demand across asset classes in upcoming quarters.
Shraddha Kedia-Agarwal, Director, Transcon Developers: The RBI’s decision to lower the repo rate is a significant boost for homebuyers and developers alike. With affordability being a major factor in home purchases, this reduction will encourage more buyers to enter the market, particularly in the affordable and mid-income housing segments. We also hope to see a corresponding reduction in the cost of construction financing, which will help developers keep housing prices in check and offer better value to homebuyers.
Amit Goyal, Managing Direct, India Sotheby’s International Realty: The RBI’s 0.25% rate cut after five long years—is the much-needed oxygen for the Indian economy, more particularly for the real estate sector.
It lightens EMIs, boosts investments, and signals a pro-growth stance. Coupled with income tax breaks for incomes up to ₹12 lakh in the Union Budget, it widens the path to homeownership for many aspiring buyers.
Shrinivas Rao, FRICS, CEO of Vestian: The RBI’s 25 bps reduction in the repo rate was anticipated, given the slowdown in GDP growth to 5.4% in the second quarter of FY’25, marking the slowest expansion over seven consecutive quarters. This rate cut, the first in nearly five years, aims to bolster market liquidity. It’s likely to buoy the real estate sector with expectations of major banks trimming mortgage rates. However, it is also expected to exert downward pressure on rupee value in international markets, barring foreign investments.”
Nishant Deshmukh, Founder and Managing Partner, Sugee Group: The RBI’s repo rate cut after a prolonged pause is a much-needed breather for the real estate sector, particularly in the premium and mid-segment housing categories. The reduced interest rates will lower borrowing costs for homebuyers, thereby increasing demand. While this is a positive development, we urge financial institutions to expedite the transmission of this rate cut to ensure that the benefits reach the end-users seamlessly. The real estate market has been witnessing strong momentum, and this policy move will provide an added boost to the sector’s growth trajectory.
Kuldeep Jain, Founder & CEO, Build Capital: The rate cut by RBI will ease financing costs for homebuyers while enabling developers to secure funding at better terms. This move will improve cash flows, boost liquidity, and support early-stage real estate funding. With borrowing costs reducing, we hope this signals a more accommodative stance, further driving growth in the housing sector.”
Piyush Bothra, Co-Founder and CFO, Square Yards: The Reserve Bank of India’s decision to cut the repo rate by 25 basis points to 6.25% is a welcome move for the real estate market. This will lower borrowing costs for home buyers, making home loans more accessible and improving buyer sentiment. Additionally, it could enhance liquidity in the banking system, easing access to financing for developers. Combined with recent tax reforms, stable inflation projections and sustained economic growth, it will act as strong tailwinds for the residential real estate sector. Needless to say “acchhe din” for real estate will continue for a long time.
Vikas Sutaria, Founder, Irah Lifespace: The repo rate cut is a positive move for the real estate industry, especially for segments like luxury and second homes, where affordability plays a key role in decision-making. With lower EMIs, we anticipate an increased appetite among buyers, particularly in aspirational markets such as Alibaug and Lonavala, which have witnessed strong demand for luxury homes. We look forward to banks and financial institutions ensuring quick transmission of this benefit to homebuyers, which will sustain the sector’s momentum.”
Rohan Khatau, Director, CCI Projects: The RBI’s 25 bps rate cut is a welcome move, arriving at a pivotal moment when homebuyer confidence is on the rise and real estate investments are gaining momentum. By easing home loan EMIs, this decision will enhance affordability and encourage more aspiring homeowners to take the plunge. However, for the full benefit to reach consumers, we urge banks to expedite the transmission of rate cuts, as past hikes have not always been fully passed on.
A stable and accommodative monetary policy will be key to sustaining this positive trajectory in the real estate sector.”
Samyak Jain, Director, Siddha Group: The real estate sector has been anticipating a rate cut, and this announcement by RBI is a step in the right direction. Lowering the repo rate makes home loans more attractive for buyers, especially first-time homebuyers who rely on financing. The impact of this move will be felt across all housing segments, with increased affordability and improved liquidity in the market. We expect this to accelerate decision-making for prospective buyers and further fuel the demand for housing.
Govind Krishnan Muthukumar, Managing Director & Co-Founder, Tridhaatu Realty: This rate cut is a relief for homebuyers and developers who have been navigating a high-interest rate environment. The impact of a lower repo rate will not only be seen in reduced home loan EMIs but also in enhanced consumer sentiment, encouraging more people to invest in real estate. Additionally, for developers, this could translate into lower project financing costs, which will help manage input costs effectively. We expect banks to pass on the benefits quickly to maximize the impact of this positive policy move.
Abhishek Jain, COO, Satellite Developers Private Limited (SDPL): The repo rate cut by 25 basis points is a welcome move that will benefit both homebuyers and developers. Reduced lending rates will encourage fence-sitters to take the plunge into homeownership, thereby increasing demand. At the same time, developers will gain from better financing terms, which will help in maintaining healthy cash flows and timely project execution. We anticipate this rate cut will have a cascading effect on the sector, leading to sustained momentum in residential sales.
Shekhar.G. Patel, Managing Director & CEO, Ganesh Housing Corporation Limited: The RBI’s 25 basis point reduction in repo rate to 6.25% – a first in five years – comes at a crucial time for real estate. Given the strong investment flows we’re seeing from the GCC region, this rate cut will naturally boost business activity by making borrowing more affordable. Further, as financing becomes more accessible for the developers with enhanced liquidity, we expect a surge in new planned ventures along with the initiation of new projects. This puts emerging IT hubs such as Gujarat in a favourable position, where demand for commercial spaces is growing at a noteworthy pace.
What’s encouraging is that while luxury and premium housing have shown robust demand despite price appreciation, this rate adjustment should help drive growth in the affordable housing segment as well. Overall, we believe this policy shift will create positive momentum across both commercial and residential real estate, supporting long-term growth in our sector, mainly in Tier 2 and Tier 3 Cites.
