After a long pause, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) decides to cut the repo rate by 25 basis points – bringing a long-awaited relief to the country’s realtors. As the MPC announced the repo rate to be cut to 6.25%, after holding it at 6.5% for several quarters, stakeholders of the real estate sector cheered the move – anticipating a rise in demand for residential homes in the coming months.
According to Venkatesh Gopalakrishnan, Director Group Promoter’s Office, MD – Shapoorji Pallonji Real Estate, the move will give a “significant boost” to the real estate sector, particularly for affordable and mid-segment housing.
“We commend the RBI for its proactive decision to cut the repo rate, marking an essential move after nearly five years. Lower borrowing costs will further enhance home loan affordability, bringing the dream of homeownership closer for many aspiring buyers,” says Gopalakrishnan, adding that the “move is likely to regenerate investments in the real estate sector, providing the much-needed motivation to sustain its growth. We are optimistic that this rate cut will positively influence market sentiment, strengthen buyer confidence, and catalyze long-term growth across all segments of the industry.”
Pradeep Aggarwal, Founder & Chairman of Signature Global (India), said the RBI move signals a pro-growth shift aimed at sustaining India’s economic momentum as the move will enhance liquidity, encourage investments, and stimulate demand across key sectors.
“For real estate, a rate cut after such a long period is a significant boost. Lower borrowing costs will improve home affordability, strengthening buyer sentiment, particularly in the mid-income and premium housing segments. Historically, reduced interest rates have triggered an upswing in housing demand, benefiting both homebuyers and developers. Additionally, improved credit access will support developers in securing funding for project execution, ensuring steady supply and timely deliveries,” says Aggarwal.
Realtor Niranjan Hiranandani, Chairman, NAREDCO feels this long-awaited and strategic move has been effected “at a crucial time”.
“It assures us that despite external geopolitical uncertainties, our domestic economic climate keeps markets efficient and demand robust. Combined with the tax benefits announced in the FY26 budget for the middle class, this policy change will boost sales velocity,” he said.
According to Dhruv Agarwala, Group CEO of Housing.com & Proptiger.com, the reduction in the key policy rate, the first in five years, will lower home loan interest rates, benefiting both prospective buyers and existing borrowers.
“The rate cut will play a crucial role in improving housing affordability in the world’s most populous country, complementing the measures announced in the recently unveiled Union Budget 2025. Additionally, the repo rate cut, along with the previously announced reduction in the CRR, will enhance liquidity for developers, positively impacting new supply and accelerating project completions,” he said.
Sector experts like Vimal Nadar, Head of Research at Colliers India says, the rate cut coupled with the recent budgetary announcements related to the creation of the 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 Rs 15,000 crore for SWAMIH II fund is likely to expedite the completion of stressed projects, boosting liquidity and spurring home-buying sentiments. Overall, evident tailwinds should boost real estate demand across asset classes in upcoming quarters,” says Nadar.