RBI Rate Cut Boosts Hyderabad's Real Estate Market
The Reserve Bank of India's (RBI) significant rate cuts have injected optimism into Hyderabad's real estate market, benefiting both developers and buyers. The city's strong fundamentals and affordable prices position it well for a robust recovery.
Rbi Rate CutReal Estate MarketHyderabadEmi ReductionProperty PricesReal Estate NewsJun 07, 2025
Announced during the RBI’s Monetary Policy Committee meeting in Mumbai on Friday, the move is expected to reduce EMIs once banks pass on the entire half-percentage-point relief. Mortgage advisers estimate that a ₹1 crore, 20-year loan could become approximately ₹3,000 cheaper per month, enhancing the purchasing power of both first-time buyers and those eyeing upgrades.
Sentiment on the ground is positive. CREDAI Hyderabad president V Rajasekhar Reddy described the cut as a welcome move that could nudge fence-sitters. He noted that Hyderabad’s real estate market, driven by end users, remains fundamentally strong.
With the city entering 2025 carrying under six quarters of unsold inventory—despite a 21% rise in primary sales last year—Rajasekhar Reddy Allipuram, founder & CEO of PropGo Infra and Realty, believes the deeper-than-expected cut could reduce this overhang by prompting quicker purchases over the next two to three quarters.
“Yet the pace of relief will hinge on how quickly lenders re-price home loans and whether input-cost inflation stays in check,” he cautioned. Any lag on either front, he warned, could blunt what is otherwise the strongest monetary tailwind the city has felt since the pandemic slowdown.
CREDAI Hyderabad’s V Rajasekhar Reddy echoed the optimism. “The unsold inventory reflects increased launches to meet anticipated demand, not stagnation,” he noted, adding that Hyderabad’s affordability and robust infrastructure pipeline position it to clear inventory faster than other metros, and to drive new project launches, provided liquidity improves and policy support persists. He also stressed the importance of timely rate transmission by banks. “Any delay dilutes the intent of such monetary interventions,” he said.
PropGo Infra’s Reddy expects public sector banks, which typically respond more quickly, to begin passing on the rate cut within the coming weeks. He warned that delays could dampen buyer interest, especially in price-sensitive segments like affordable and mid-income housing.
With prices still more affordable than in other metros, Hyderabad is well-positioned for a significant rise in real estate activity—particularly in high-demand areas like Kokapet, Neopolis, the Financial District, and Tellapur.
For now, developers, brokers, and buyers across the city appear to be reading the RBI’s decision as a green light: cheaper mortgages, easier project finance, and a shift to a “neutral” policy stance are setting the stage for the next phase of the city’s housing cycle.
Local realtors say that many potential buyers are already revisiting affordability calculations. Several agents in Gachibowli and Narsingi say households are now willing to stretch budgets by 5–7%, confident that EMIs will remain manageable.
Developers are hopeful that the ₹2.5 lakh crore liquidity released through the CRR cut will soon translate into cheaper working capital, which is essential as labour costs rise and material prices remain volatile, putting pressure on project viability. Reflecting this sentiment, the Nifty Realty index surged 4.47% on Friday—its sharpest single-day gain in months.
Frequently Asked Questions
What is the impact of the RBI's rate cut on home loans?
The RBI's 50-basis-point cut in the policy repo rate and 100-basis-point reduction in the Cash Reserve Ratio (CRR) is expected to reduce EMIs. A ₹1 crore, 20-year loan could become approximately ₹3,000 cheaper per month, enhancing the purchasing power of both first-time buyers and those eyeing upgrades.
How does the rate cut affect unsold inventory in Hyderabad's real estate market?
The rate cut is expected to reduce the unsold inventory by prompting quicker purchases over the next two to three quarters. This is particularly beneficial as the city has under six quarters of unsold inventory despite a 21% rise in primary sales last year.
What are the key factors influencing the real estate market in Hyderabad?
Key factors include the city's strong fundamentals, driven by end users, affordability, and robust infrastructure. These factors position Hyderabad to clear inventory faster than other metros and drive new project launches.
How important is the timely rate transmission by banks?
Timely rate transmission by banks is crucial. Any delay in re-pricing home loans can dilute the intent of monetary interventions and dampen buyer interest, especially in price-sensitive segments like affordable and mid-income housing.
What is the expected impact on the Nifty Realty index?
The Nifty Realty index surged 4.47% on the day the RBI announced the rate cut, reflecting the positive sentiment and expectations of cheaper working capital and improved project viability in the real estate sector.
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