India’s real estate market may be poised for a fresh surge following the Reserve Bank of India’s recent 25-basis-point repo rate cut. Industry bodies and experts view the move as a timely intervention, designed to lower borrowing costs, improve liquidity, and stimulate demand across residential and allied sectors.
CREDAI President Shekhar Patel described the rate cut as a “confidence booster” for the market, noting that lower interest rates can reduce home loan EMIs, making properties more affordable for buyers. “This move will further strengthen positive market sentiment, lower borrowing costs, support credit growth, and stimulate demand across sectors—including real estate,” he said. Patel added that with inflation at a decadal low, liquidity is no longer a primary concern for the central bank, and the rate cut could ensure a strong close to the financial year, sustaining momentum in housing demand across all segments.
Parveen Jain, President of NAREDCO, echoed these sentiments, describing the repo rate reduction as an important step to inject fresh momentum into India’s economy and the real estate sector. He noted that cheaper home loans would not only benefit buyers but also encourage new investments in allied industries, generating employment and boosting overall economic activity. “Lower interest rates make home loans more affordable, which supports homebuyers and strengthens demand,” Jain said.
The timing of this move could be particularly significant for the housing market. Over the past three years, residential sales surged, primarily driven by pent-up demand following the COVID-19 slowdown in 2020 and 2021. The luxury housing segment led this growth, benefiting from higher disposable incomes and evolving lifestyle preferences. However, the first nine months of the current calendar year have seen a dip in sales volumes, largely due to a higher base effect and sharp post-pandemic price appreciation. Analysts believe that the rate cut, coupled with strong economic growth in the first two quarters of fiscal 2025-26, could help reverse this slowdown, reigniting housing demand, particularly in mid-income and premium segments.
Beyond immediate affordability, the policy is expected to boost developers’ confidence, helping them plan and execute projects more efficiently. Lower borrowing costs reduce financial pressure on ongoing developments, and improved liquidity can facilitate faster project execution. This could also support new launches in high-demand micro-markets, offering buyers a wider range of options and fostering balanced demand-supply dynamics.
Experts also point to the broader macroeconomic context. With inflation subdued and GDP growth accelerating, the central bank’s measures are designed to sustain India’s ‘Goldilocks’ economic moment, moderate inflation, robust growth, and a stable monetary environment. For homebuyers, this translates into more predictable loan rates and manageable EMIs, which could be a decisive factor for first-time buyers or those upgrading to premium properties.
The repo rate cut is more than a technical monetary policy decision; it represents a potential catalyst for renewed activity in India’s real estate market. For developers, it strengthens project viability and investor confidence. For buyers, it offers a chance to leverage improved affordability. And for the broader economy, it could help stimulate consumption and investment, sustaining growth momentum as India heads into the latter half of the fiscal year.
The coming months will reveal the extent to which these measures translate into tangible demand, but early indicators suggest that the real estate sector is likely to respond positively, making the RBI’s move a key inflection point for the housing market in 2025-26.
