The Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) will begin its three-day meeting on Wednesday in Mumbai to decide on the policy interest rates. The meeting is being held under the chairmanship of RBI Governor Sanjay Malhotra.
Following two earlier rate cuts that eased borrowing costs, industry leaders expect the upcoming reduction to further boost consumer confidence, especially among homebuyers, and support broader economic growth.
Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd., says, "The Reserve Bank of India is once again expected to offer major relief to homebuyers in its upcoming MPC meeting by reducing the repo rate by 25 basis points, driven by easing inflation and a stable economic outlook. If the rate cut materializes, it would mark the third consecutive reduction and provide a significant boost to the overall economy, particularly the housing sector.”
Vimal Nadar, National Director and Head of Research, Colliers India added, “We expect the RBI to continue its growth-supportive stance and further rationalize the repo rate. While inflation being in control provides the elbowroom for continuation of an accommodative policy; impact of external trade volatilities and atypical monsoon patterns are likely to have a bearing on future growth prospects. A third consecutive reduction in benchmark lending rates can spur homebuyers’ sentiment and resultantly improve housing demand particularly in affordable and middle-income segments. For developers too, the rate cut could aid in gradual inventory clearance and offer financial relief by lowering of borrowing costs.”Aman Gupta, Director of RPS Group stated, “Metro markets might disregard a 50 bps cut as being 'too little, too late'. Given that EMI burden is already consuming 55% of income in major cities, any rate reductions will be too late to offset pricing stagnation. Developers have already pushed rates up by another 3–5%, as the flagging interest was creeping back towards affordability anyway. Investor yields are likely to worsen again, as lower rates will make buying not renting more appealing—yields are now below 2.6%. The real game-changer? Potentially more meaningful sites like Jewar or Dholera, where stagnant entry prices combined with good infrastructure links, will amplify the impact of financing perks—in and around transit stations, a 15–20% increase in sales could be achieved.”
Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Private Limited expressed, “If the RBI were to look at a possible 50 bps "jumbo cut", it could create a signaling effect for how loans are determined affordable, but it also needs forethought as set out below. Potential borrowers could see their EMIs decrease in the order of Rs800-Rs1,200 per lakh depending on whether they are on a floating-rate loan, and it would immediately improve their liquidity. However, deposit rates could go down from already near record levels of 2.7% on savings for conservative savings which could compromise savers. Depreciation of the rupee, with CPI inflation linked to FY26 at 3.5%, may not even become a large factor if they choose to refinance their existing high-cost debt or move a loan to the repo rate. As issues with uncertain global tariffs and fiscal deficits are increasing, I would say moderate the expected transmission effects of this proposed cut when and if it occurs. With the mention of the term deposits, I would act as quickly as possible, and borrowers should be aware of their reset clauses to derive the most benefit.”
Shrinivas Rao, FRICS, CEO, Vestian said, “Reserve Bank of India (RBI) is expected to lower the repo rate by 25 basis points for the third consecutive time to boost consumption as inflation continues to remain below the 4% target range. It is also anticipated to maintain an ‘accommodative’ monetary policy stance to support growth amid global uncertainties triggered by US tariffs and geopolitical frictions. This rate cut is expected to bring relief to both homebuyers and developers, as most commercial banks are likely to follow suit and reduce interest rates. While homebuyers will be able to secure home loans at lower rates, developers will benefit from low borrowing costs, potentially boosting affordability and investments in the real estate sector.”
Keshav Mangla, GM Business Development of Forteasia Realty Pvt. Ltd said, “An aggressive easing by the RBI could help kickstart construction financing but will not address the key issues at hand. While lower borrowing costs may incentivize developer sales in peripheral areas, the Tier-1 oversupply remains. It is also critical to note that the current lending tightness in housing finance could stifle transmission to affordable housing. If there is any surge of investor flows, it will occur in projects with national infrastructure highway connections or logistics parks. To keep things going, the RBI needs to complement cuts with injections of liquidity because a huge systemic surplus is needed before banks can unlock credit for stalled mid-income housing projects.
