Is Now the Best Time to Buy a New Home? Real Estate Experts Weigh In
With the Reserve Bank of India (RBI) cutting the repo rate by 100 basis points over the last four months, real estate experts are optimistic about the impact on homebuying, especially for first-time buyers and the mid-income and premium housing segments.
Real EstateHome LoansRepo RateHousing MarketFirsttime BuyersReal EstateJun 06, 2025
Real estate experts are optimistic about the potential benefits of this rate cut. Manju Yagnik, Vice Chairperson of Nahar Group and Senior VP of NAREDCO, Maharashtra, emphasized the timely nature of the RBI's decision. "The RBI’s decision to reduce the repo rate by 50 basis points is a strong and timely intervention, especially amid early signs of demand moderation in the residential sector," Yagnik stated.
This rate cut is expected to significantly improve affordability, especially for first-time homebuyers. Yagnik added, "This rate cut is poised to create a significant improvement in affordability, especially for first-time purchases. This will help revive interest in mid-income and premium housing segments."
Aman Sarin, Director and CEO of Anant Raj Limited, shared a similar sentiment. "We believe this will have a positive impact on the real estate sector, particularly the mid- and high-end segments, as interest rates become more affordable with reduced EMI and improvement in loan eligibility," he said.
Pradeep Aggarwal, founder and chairman of Signature Global (India), noted that the demand for mid and premium segment homes has already been on the rise following previous rate cuts. "This larger reduction will further accelerate interest from both homebuyers and investors," Aggarwal stated.
Additionally, the positive market sentiment around the possibility of further rate cuts this financial year is expected to boost the real estate sector. "This bodes well for the real estate sector, paving the way for sustained growth and renewed confidence in the housing market," Aggarwal added.
The impact of the repo rate cut on home loan interest rates is a significant factor. "Lowering the repo rate to 5.5% will have a cascading effect across the lending ecosystem, bringing home loan interest rates well below 7.75%—a highly encouraging development for both existing and prospective homebuyers," Nahar explained.
For developers, the availability of cheaper credit will ease liquidity constraints, accelerate project implementation, and improve delivery timelines. "This will, in turn, provide much-needed cash flow to absorb the unsold inventory while generating fresh buyer interest that is good for the real estate value chain as a whole," she added.
Sarin highlighted the benefits for both existing and new borrowers. "This cumulative 100 basis point reduction will provide significant relief in terms of reduced interest burden," he said.
Anshuman Magazine, Chairman and CEO of CBRE for India, South-East Asia, Middle East, and Africa, emphasized the broader economic benefits. "This reduction is expected to lead to lower borrowing costs, increased liquidity, and enhanced consumer spending power. For the real estate sector, this move is particularly beneficial as it will make home loans more affordable, stimulating demand and driving growth. The reduced interest rates will also encourage developers to take on new projects, boosting construction activity and creating employment opportunities," Magazine stated.
Jash Panchamia, executive director at Jaypee Infratech Limited, noted that the RBI’s decision to slash the repo rate by 50 basis points and the CRR by 100 bps is aimed at fueling consumption and accelerating investment. "With several scheduled commercial banks already offering home loans below 8 percent, today’s decision may lead to a broader transmission of lower rates across the lending ecosystem. This will not only ease the financial burden on borrowers but also enhance affordability across housing segments, offering significant relief to homebuyers and providing a timely push for those planning property purchases," he added.
In summary, the RBI's repo rate cut is a positive development for the real estate market, making home loans more affordable and boosting demand in the mid-income and premium housing segments. For first-time buyers, this is a particularly opportune time to consider purchasing a new home.
Frequently Asked Questions
What is the repo rate and how does it affect home loans?
The repo rate is the interest rate at which the central bank (RBI) lends money to commercial banks. A reduction in the repo rate typically leads to lower home loan interest rates, making it more affordable for homebuyers to take out loans.
Who benefits the most from the repo rate cut?
First-time homebuyers and those in the mid-income and premium housing segments are expected to benefit the most. The rate cut improves affordability and reduces the financial burden of home loans.
How will the repo rate cut affect developers?
The repo rate cut will provide developers with cheaper credit, easing liquidity constraints and accelerating project implementation. This can help absorb unsold inventory and generate new buyer interest.
What is the expected impact on the housing market?
The repo rate cut is expected to stimulate demand in the housing market, particularly in the mid-income and premium segments. It will make home loans more affordable and encourage new construction and employment opportunities.
Are there any potential downsides to the repo rate cut?
While the repo rate cut is generally positive, it could lead to increased inflation if not managed properly. However, with inflation currently within the RBI’s comfort zone, the benefits are expected to outweigh the potential risks.
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