2025: Government Policies Boost Indian Real Estate Sector

KOLKATA, Dec 27: Proactive government interventions and supportive monetary policies in 2025 emerged as a powerful catalyst for India’s real estate sector, reviving momentum, improving affordability, and driving sustained growth across segments.

From the Reserve Bank of India’s (RBI) calibrated repo rate cuts to the landmark GST 2.0 reforms, policy measures delivered tangible financial relief, simplified taxation, and restored buyer confidence. As a result, the sector not only weathered global uncertainties but also emerged stronger, making homeownership more accessible and development more viable.

Two key financial levers in 2025 fundamentally altered both the cost of construction and the cost of credit. The RBI led a decisive monetary easing cycle, cutting the repo rate by a cumulative 125 basis points, from 6.5 per cent at the start of the year to 5.25 per cent by year-end. This significantly reduced home loan interest rates, easing EMI burdens for middle-class homebuyers and boosting purchasing power.

September 2025 marked the rollout of GST 2.0, which streamlined the indirect tax structure into a simplified two-slab regime of 5 per cent and 18 per cent. Most notably, GST on cement was reduced from 28 per cent to 18 per cent, directly lowering raw material costs and generating savings across the construction supply chain.

Industry reports termed the policy shifts of 2025 a “blessing in disguise,” offering measurable benefits to both homebuyers and developers. Lower interest rates brought home loan EMIs to decade lows, while GST rationalisation reduced input costs. Simultaneously, strengthened RERA norms ensured greater transparency through mandatory third-party audits, reinforcing buyer trust.

Infrastructure upgrades, including the Dwarka Expressway and major metro expansions, further enhanced connectivity, opening up affordable, high-quality housing options in emerging micro-markets. For developers, the policy framework provided liquidity, cost stability, and scalability. The reduction in cement GST alone cut construction costs by an estimated 3-5 per cent, improving margins. Combined with lower borrowing costs, this enabled faster completion of stalled projects.

Large-scale infrastructure expansion across NCR and Tier-2 and Tier-3 cities unlocked new land banks, allowing developers to diversify portfolios and meet rising demand for modern and sustainable housing. The year emerged as a defining phase for Indian real estate, driven by rate cuts, tax rationalisation, and regulatory clarity. Lower borrowing costs improved affordability for buyers, while operational efficiencies eased pressure on developers. Strengthened RERA norms and accelerated infrastructure rollouts further boosted confidence among end-users and institutional investors alike.

“2025 will be remembered as the year when policy stability met market confidence in Indian real estate, especially across Delhi NCR. RBI’s steady rate cuts restored buyer trust and improved affordability, while GST 2.0 brought clarity and compliance efficiency for developers,” said Rahul Singla, Director, Mapsko Group.

Yashank Wason, Managing Director, Royal Green Realty, said that GST 2.0 and a stable interest rate environment translated into faster project execution and renewed housing demand across NCR, particularly in commercial and mixed-use developments.

Rajat Bokolia, CEO, Newstone, said, “Supportive monetary and fiscal policies in 2025 revitalised the real estate sector. Repo rate cuts improved affordability, GST 2.0 simplified taxation, and stronger RERA norms enhanced transparency and investor confidence. Infrastructure expansion unlocked new growth corridors, especially in NCR and Tier-2 cities.”

As 2025 draws to a close, government-led reforms have firmly positioned Indian real estate as a resilient, transparent, and inclusive pillar of economic growth. Lower EMIs, reduced costs, and enhanced connectivity have made homeownership more attainable, while developers have benefited from improved liquidity and rising demand.

Looking ahead to 2026, sustained policy support is expected to deepen focus on sustainability, technology, and affordability, creating long-term value for all stakeholders. 2025 was not merely a year of recovery, but the year government policies truly gave wings to Indian real estate.