Realtors rejoices RBI's move of 25% Repo Rate cut to Boost Housing Segment

According to experts and real estate developers, the RBI's move to lower the repo rate by 25 basis points will improve the mood of homebuyers and increase demand for homes because house loan EMIs will be lowered.

According to them, the lower rates will result in lower borrowing costs for developers and purchasers, which will further incentivize real estate developments.

For the first time in five years, the Reserve Bank of India's (RBI) Monetary Policy Committee (MPC) voted on February 7 to lower the repo rate by 25 basis points (bps), from 6.5 percent to 6.25 percent.

According to market watchers, a rate cut would boost purchasing power and consumption while also improving liquidity, which would ultimately spur economic expansion. Since lower home loan interest rates are a big lure for potential homeowners, lower borrowing costs might significantly improve the real estate industry.

Experts’ comments on RBI Monetary Policy announcement:

Samir Jasuja, Founder & CEO, PropEquity:

The RBI’s focus on maintaining stable inflation while promoting growth is a welcome move, and in line with the efforts of the government. The 25bps cut in repo rate, along with the announcements in the Budget towards boosting consumption, will help increase economic activity and direct investments towards the real estate sector especially in the affordable and mid-income housing. Making borrowing cheaper will not only help homebuyers, both new and old, but also provide liquidity to the developers.

According to PropEquity, the supply of homes in the affordable and mid-income category (priced Rs 1 crore and below) across top 9 cities has dipped by 36% in the last two year and 30% in the last one year in 2024 with Hyderabad and NCR witnessing drastic fall in supply in this category.

Garvit Tiwari, Co-Founder & Director, InfraMantra:

The 25bps cut in repo rate will help reduce the EMI of home loan borrowers and make new loans cheaper. This is a welcome move in view of the fact that the real estate has come under some pressure in the last few quarters. While the luxury real estate segment may not be impacted much, this move will immensely benefit affordable and mid-income housing. Declining urban consumption is a cause for concern and with this cut, some reversal is likely in the coming quarters.

Pradeep Aggarwal, Founder & Chairman, Signature Global (India)

"The RBI’s decision to cut the repo rate to 6.25%—its first reduction in nearly five years—signals a pro-growth shift aimed at sustaining India’s economic momentum. With GDP growth projected at 6.7% for FY26, this 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.

The real estate sector, contributing nearly 7% to India’s GDP and projected to reach 13% by 2030, will gain further momentum as urbanization accelerates and infrastructure investments expand. This move will also positively impact allied industries such as cement, steel, and construction materials, creating a multiplier effect on employment and overall economic activity. With a sustained focus on affordability and sustainable development, India’s housing market is well-positioned for long-term growth."

Akash Khurana, President &CEO, Krisumi Corporation

The Central Bank’s unanimous decision to cut the repo rate by 25 bps to 6.25 percent is definitely a welcome move that will enhance liquidity in the economy, making credit more accessible and boosting overall consumption. This follows the last MPC's decision to reduce the Cash Reserve Ratio (CRR) by 50 basis points, which has already injected significant funds into the banking system. Lower interest rates are expected to stimulate housing demand by making home loans more affordable, strengthen market confidence, and provide much-needed momentum to the real estate sector, ultimately supporting economic growth.

Sahil Agarwal, CEO, Nimbus Group

We welcome the RBI’s decision to cut the repo rate. There were strong expectations for a modest 25 bps rate cut in today’s monetary policy meeting, and the RBI has delivered on those expectations. The decision was driven by the need to support GDP growth, inflation remaining within a comfortable range for the past few quarters, and prevailing tight liquidity conditions. Additionally, global trade dynamics and financial market trends further reinforced the case for a rate reduction.

The repo rate cut will not only improve liquidity but also boost consumption and purchasing power, ultimately driving economic growth. Lower borrowing costs are set to provide a significant push to the real estate sector, as reduced home loan interest rates make homeownership more accessible. This move is expected to encourage higher demand for housing, benefiting both end-users and investors alike.

Udit Jain, Director, OneGroup

The 25 basis point cut in the repo rate is a welcome move, particularly for homebuyers in the affordable and mid-segment categories. Given that these housing segments are highly cost-sensitive, a lower EMI burden will undoubtedly encourage more buyers to take the plunge into homeownership.

Additionally, the rate cut is expected to provide a strong boost to housing demand in Tier II and Tier III cities, where affordability plays a crucial role in purchasing decisions. Combined with other favorable factors—such as increased savings from revised tax slabs in Budget 2025-26 and the upcoming implementation of the 8th Pay Commission—this move sets the stage for sustained growth in the real estate sector. The combined impact of these measures will give a much-needed boost to industries linked to housing, enhance home loan eligibility, improve affordability, and drive higher demand for housing in the near future.

Aman Sarin, Director & Chief Executive Officer, Anant Raj Limited

We welcome the RBI’s decision to cut policy rates, a crucial step toward stimulating consumption and strengthening purchasing power.

This rate reduction is set to bring down lending rates, making borrowing more accessible and affordable for consumers. In particular, it serves as a strong catalyst for the real estate sector, encouraging fence-sitting homebuyers to move forward with their purchase decisions. Given the RBI Governor’s assurance that all economic factors will be carefully considered to maintain balanced growth and stability, this cut could be helpful in sustaining economic momentum.

Ramani Sastri, Chairman and MD, Sterling Developers

We believe this decision by RBI to cut repo rate will boost investor confidence, encourage housing demand with an affordability factor, and support the overall development of the real estate sector. Home buyer confidence is at an all-time high and this naturally urges consumers to invest in their dream homes as the overall climate is geared towards sustained demand. As India's economy continues to grow, there is no hesitation among the homebuyers to invest in residential real estate for long-term returns. Overall, the market outlook is certainly positive and given the confidence built in recent times, we do believe that markets will continue to see sustained growth over the next few years, providing appealing prospects for both first-time buyers and seasoned investors. Also, owing to landmark infrastructure projects by the government, the real estate market has been experiencing tremendous growth and development, gaining investor confidence across all asset classes.  We definitely hope to see further lower interest rates which will provide impetus to not just real estate and housing demand but across industries and economic growth. This rate cut would also infuse much-needed liquidity into the real estate sector. We believe that the sustained demand will further solidify the sector’s upward trajectory well into 2025, cementing the Indian real estate market as a key driver of economic growth.

 Ashish Kukreja, CEO, Homesfy & mymagnet.io

The RBI's repo rate reduction by 25 basis points to 6.25% marks a pivotal moment for India's real estate sector, opening up new avenues for growth. The reduction in repo rate is an accommodative stance to increase the demand for homes by making their loans affordable. It provides much-needed relief to homebuyers with lowered equated monthly installments, offering a sense of reassurance and stability. This rate cut will enable a wide range of end users and investors to seize the opportunities in the real estate market in 2025, sparking excitement for the potential returns on investment.