Will a Repo Rate Cut Spark a Festive Season Real Estate Boom

As the country enters the auspicious Navratri-to-Diwali period, all eyes are on the Reserve Bank of India’s Monetary Policy Committee (MPC) meeting, whose outcome will be announced tomorrow, October 1. The real estate sector, which traditionally witnesses peak sales during the festive quarter, is waiting keenly to see whether the RBI will deliver a repo rate cut to further fuel market sentiment.

Industry expectations are riding high on the possibility of a 25-basis-point reduction in the repo rate. If the cut materialises, it would immediately translate into lower EMIs on home loans, car loans, and personal loans.

For homebuyers, especially those in the affordable and mid-segment categories, this could serve as a major relief and a strong trigger to advance purchase decisions during the festive season.

The timing of this meeting is particularly significant. Developers across Delhi-NCR, Mumbai, Bengaluru, and other key markets have already rolled out festive discounts, subvention schemes, and attractive offers to capture demand. Banks, too, are pushing festive loan campaigns. A repo cut now could act as a “double booster” for demand—combining seasonal sentiment with real financial relief.

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The MPC’s three-day deliberation, chaired by RBI Governor Sanjay Malhotra, comes at a time of heightened global uncertainty, with geopolitical tensions escalating and the U.S. imposing a 50 percent tariff on Indian exports. Domestically, however, inflation has eased, giving the RBI some room to support growth. The central bank had previously cut policy rates by a cumulative 100 basis points between February and August this year, but maintained a status quo in its last meeting, citing global headwinds.

Festive hopes and buyer psychology

The festive season has always been the most decisive period for the housing market. Many Indians view property purchases during this time as auspicious, leading to a natural surge in bookings. Developers acknowledge that this is when buyers make faster decisions, often encouraged by offers and schemes. Should the RBI reduce rates now, industry experts believe it could provide the perfect catalyst to convert fence-sitters into buyers.

What experts and developers are saying

Real estate developers and analysts point out that while sentiment is already strong due to GST cuts and robust infrastructure development in key cities, a rate cut would amplify momentum. Affordable and mid-income housing are likely to benefit most, while luxury housing could see enhanced liquidity flows.

The MPC’s decision tomorrow will therefore not just influence lending and borrowing costs, but also signal the central bank’s stance on growth versus caution at a time when the real estate sector is banking on a record festive quarter.

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Dr Gautam Kanodia, Founder, KREEVA and Kanodia Group, said, "The RBI’s decision to halt repo rate at 5.5 percent in August reflected a commendable balance of foresight and stability, something that has directly benefited the real estate sector. Since February this year, the RBI has already cut rates by 100 basis points. While a potential cut in the upcoming announcement could further accelerate sales, maintaining the rate still keeps borrowing costs manageable and buyer sentiment positive. Real estate continues to be a reliable investment avenue, particularly during the festive season, when market activity traditionally peaks. A steady or slightly reduced rate now could serve as a timely boost for both sales and broader economic confidence."

Vikas Dua, Founder & Director, Chintamanis, said, “A repo rate cut at this juncture would be a decisive catalyst for the real estate sector, especially as we step into the festive season — traditionally the most auspicious and active period for property investments in India. Lower borrowing costs not only enhance affordability for homebuyers but also elevate market sentiment at large. This could unlock significant pent-up demand, particularly from first-time buyers, while also reinvigorating investor confidence in long-term prospects. For developers, it creates the perfect environment to accelerate launches and sales momentum. Beyond the sector, such a move would deliver a multiplier effect — stimulating consumption, driving allied industries, and contributing meaningfully to overall economic growth. A timely rate cut, therefore, has the potential to transform the festive quarter into a landmark growth phase for Indian real estate.”

Sanjay Sharma, Director of SKA Group, said, “In our experience, the period from Navratri to Diwali has always been the most active season for bookings. This time, if EMIs come down, buyers’ confidence will get a further boost. Especially those who have been waiting on the sidelines are likely to make a decision. This will infuse fresh energy into the market and accelerate project sales.”

Ashok Singh Jaunapuria, MD & CEO, SS Group, said, "With the festive season underway, a potential rate cut could provide a timely boost, reigniting interest among buyers in mid-income and emerging premium segments. Even if the rate is maintained, the combination of stable EMIs and the recent GST reduction offers a supportive backdrop for property purchases. This blend of macro-level stability and festive optimism equips both buyers and developers with the confidence to make decisive moves, sustaining momentum in the real estate sector."

Yash Miglani, Managing Director, Migsun Group, says, “In the upcoming MPC meeting, we expect the RBI to hold the repo rate steady this October. This will provide much-needed clarity for developers planning both residential and commercial launches. Stability ensures buyers can access affordable financing without hesitation, reinforcing confidence in making property purchases. That said, a rate reduction, if it comes, would further lower home loan costs, giving a significant nudge to buyer sentiment. Coupled with the recent GST reduction on under-construction properties, this alignment could make the festive season an ideal time for new investments in real estate.”

Prakash Mehta, Chairman and Managing Director, Ocus Group, said, “If the repo rate is reduced again this time, investing in the commercial and retail sectors will become even more feasible. With lower EMIs, both buyers and investors will face reduced monthly liabilities, which will ease the burden of purchasing new projects and stores, thereby boosting market momentum.”

Sakshee Katiyal, Chairperson, Home & Soul, said, “Every year, bookings see an uptick before Diwali, but if EMIs come down, this trend will strengthen even further. In our view, there is potential for double-digit growth in sales this season. Demand is expected to rise significantly, especially in regions like Yamuna Expressway and Greater Noida West.”

Dr Vishesh Rawat, Vice-President and Head of Marketing, Sales and CRM at M2K Group, said, “The impact of a repo rate cut directly reflects in the pockets of homebuyers. Lower EMIs mean reduced monthly expenses and enhanced purchasing capacity. During the festive season, when people consider new investments auspicious, this step will positively influence buyer sentiment and help accelerate real estate sales.”

Ajay Tyagi, Chief Sales Officer, Better Choice Realtors, said, "As the October MPC decision approaches, the housing ecosystem in NCR is closely watching for any signals. A rate cut, alongside the recent GST reduction, would further enhance affordability, helping families translate festive optimism into action. Even if the rate is maintained at 5.5 percent, the combined effect of stable EMIs and lower GST already supports buyer confidence. With festive buying in full swing, this period naturally encourages home purchases, benefiting both end-users and developers while providing much-needed momentum to the market."

Vishal Sabharwal, Head Sales, Orris Group, said, “For first-time homebuyers, EMIs remain the most crucial factor, and even a minor reduction in repo rate can create a significant difference in their decision-making. Cheaper loans not only boost affordability but also instill greater confidence among buyers. With the festive season adding to the positive sentiment, we anticipate a stronger surge in demand and heightened interest in the market this time.”