How the Repo Rate Cut 2025 Affects Homebuyers & Real Estate

New Delhi: The Reserve Bank of India (RBI) has reduced the Repo Rate by 25 basis points to 6.25% in its latest Monetary Policy Committee (MPC) meeting. This marks the first rate cut since May 2020 and is expected to provide significant benefits to the real estate sector by making home loans more affordable and boosting housing demand.

Industry Experts React to the Repo Rate Cut 2025

Real estate leaders have welcomed the move, highlighting its potential to drive sales, improve liquidity, and reduce unsold housing inventory.

G Hari Babu, National President, NAREDCO, stated that the lower interest rates will encourage developers to launch new projects, benefiting both homebuyers and investors. The commercial real estate segment is also expected to gain traction as borrowing costs decline.
Manoj Gaur, Chairman, CREDAI National, emphasized that the Repo Rate Cut 2025, combined with income tax rebates and tax concessions on second homes and rental income, will enhance liquidity and boost real estate investments.
Boman Irani, President, CREDAI National, noted that while inflation remains above the RBI’s 4% target, further rate cuts in the coming quarters could provide a stronger impetus to housing demand.

Impact on Homebuyers and Developers

Lower interest rates will have a direct impact on homebuyers, particularly those with floating-rate loans. According to Ramesh Menon, Founder Director, Delhi Consortiums, reduced EMIs will improve housing affordability and stimulate demand.

Udhav Poddar, CMD, Bhumika Group, highlighted that the Repo Rate Cut 2025 will boost market sentiment and encourage further reductions in the future.
Venkatesh Gopalakrishnan, MD, Shapoorji Pallonji Real Estate (SPRE), pointed out that the move will particularly benefit the affordable and mid-segment housing markets.
Amit Bhagat, CEO & MD, ASK Property Fund, stressed that the affordable and lower mid-income segments, which are highly sensitive to interest rate fluctuations, will see a positive shift.
Shishir Baijal, Chairman & MD, Knight Frank India, believes that if banks pass on the benefits, the demand for homes priced below Rs 50 lakh could see significant growth.

Broader Economic and Market Implications

The Repo Rate Cut 2025 is also expected to enhance economic activity, providing a much-needed boost to both demand and supply in the housing sector.

Pradeep Aggarwal, Founder & Chairman, Signature Global (India), emphasized that lower borrowing costs will strengthen buyer sentiment and improve credit access for developers.
Ashish Puravankara, MD, Puravankara Group, mentioned that the decision aligns with recent fiscal policies and investment measures outlined in the Union Budget 2025.
Anshul Jain, Chief Executive, India, SEA & APAC Tenant Representation, Cushman & Wakefield, believes the move will stimulate growth, particularly in the affordable and mid-income housing categories.

Future Outlook for the Real Estate Sector

With inflation under control and a stable fiscal deficit, experts anticipate further rate cuts in the coming months.

Niranjan Hiranandani, Chairman, NAREDCO, noted that the reduction in the Repo Rate Cut 2025 signals resilience in the economy and aligns with the government’s tax benefits for the middle class.
Anuj Puri, Chairman, ANAROCK Group, expects first-time homebuyers to take advantage of the lower interest rates and enter the housing market.
Domnic Romell, President, CREDAI-MCHI, urged banks to pass on the rate cut benefits to borrowers, especially in high-demand areas like the Mumbai Metropolitan Region (MMR).
Rohit Gera, MD, Gera Developments, emphasized that quick transmission of lower rates by banks will be key to driving housing demand.
Prashant Sharma, President, NAREDCO Maharashtra, called for banks to swiftly implement the rate reduction to enhance affordability for buyers.

Conclusion

The Repo Rate Cut 2025 is expected to have far-reaching implications for the real estate sector, improving affordability, boosting sales, and encouraging new project launches. Industry experts remain optimistic that banks will pass on the benefits to consumers, further strengthening housing demand across various segments. With potential rate cuts in the future, the sector is poised for sustained growth in the coming months.

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