RBI Repo Rate Cut to 5.25% Boosts Real Estate Market for a Strong 2026

The Reserve Bank of India (RBI) made a surprising and strategic move in 2025 by cutting the repo rate by 25 basis points to 5.25%, its lowest level in the last three years. This unanimous decision by the Monetary Policy Committee (MPC), headed by Sanjay Malhotra, marks the beginning of a rate cycle with gradually falling rates aimed at stimulating economic growth. The central bank maintained its neutral stance, indicating that it remains open to further moves in either direction.

Governor Sanjay Malhotra emphasized that the strong GDP growth, declining inflation, GST rationalization, and robust festive spending have created a perfect scenario for a measured injection of liquidity and a lift in market sentiment. The rate cut is particularly significant for interest-sensitive sectors, most notably real estate, where both developers and homebuyers are anticipating a revival of demand, quicker decision-making, and enhanced affordability in the coming months.

What Real Estate Experts Believe

Mr. Sahil Agarwal, CEO of Nimbus Realty, commented, “The market has been waiting for relief in interest rates for quite some time, and this repo rate cut is significant for both developers and homebuyers. We expect renewed customer interest in new launches as well as under-construction projects. This decision has the potential to drive a 15–20% rise in housing demand from the next quarter. We are confident that the momentum in NCR’s housing activity will become clearly visible in the coming months.”

Mr. B.K. Malagi, Vice Chairman of Experion Developers, added, “The real estate sector welcomes the RBI’s announcement of reducing the repo rate by 25 bps. Effectively, it brings down the current lending rate to 5.25%, the lowest in the last three years, and will encourage new homebuyers. Besides, it will also reduce the EMIs for buyers who have already taken the plunge. Real estate developers will also benefit from the lower interest rates. Coupled with benign inflation and a high GDP growth rate, the move will add to the real estate sector’s prospects.”

Mr. Sehaj Chawla, Managing Director of TREVOC Group, stated, “The cumulative softening of rates—with the latest 25 bps cut bringing the effective lending environment to 5.25% from 6.50% last year—marks a total reduction of 1.25%, which is a major boost for homebuyers. Lower borrowing costs directly translate into higher purchasing power and faster decision-making. Supported by stable inflation and strong GDP momentum, this move sets the stage for accelerated growth across the real estate sector.”

Mr. Sandeep Chhillar, Founder and Chairman of Landmark Group, noted, “The RBI bringing the repo rate down by 25 basis points marks a strong pro-growth signal and undoubtedly benefits the real estate sector. With home loan rates likely to fall further, affordability will improve, especially for first-time homebuyers. This move is expected to reignite demand, sustain buyer interest, and create a favorable environment for continued growth across the housing market.”

Dr. Gautam Kanodia, Founder of KREEVA and Kanodia Group, observed, “The RBI’s move to cut the repo rate by 25bps and bring it to 5.25% is in line with the sector’s expectations. The decision comes as a timely move aimed at stabilizing the economy in the coming year. This significant cut is expected to directly benefit the real estate sector by lowering home loan interest rates, thereby making homeownership more accessible. For developers, it paves the way for expanding their presence in the high-potential growth markets of NCR. On the whole, the decision is in favor of both.”

Broader Impact on the Real Estate Sector

Ms. Sakshee Katiyal, Chairperson of Home & Soul, highlighted, “The RBI’s 25 bps rate cut arrives at a crucial time for the overall real estate sector. Softer interest rates tend to lift confidence across the board—homebuyers, investors, and even commercial occupiers. This reduction will support faster decision-making in residential purchases while also improving sentiment in office, retail, and mixed-use developments. As financial conditions ease, we expect a broader pickup in activity, with the rate cut reinforcing market stability and encouraging a more sustained growth cycle for the real estate sector as a whole.”

Mr. Prateek Tiwari, MD of Prateek Group, stated, “A rate cut by 25bps after two stable policy runs reflects the central bank’s comfort with inflation trends and overall macro resilience. This is a huge relief for homebuyers in Noida-Greater Noida, where demand for premium and luxury housing has been soaring. The reduction to 5.25% can meaningfully lower EMIs, making the year-end quarter more active. By 2026, this will help maintain housing supply momentum while supporting healthier, end-user-driven growth across the region.”

Future Outlook

Mr. Rajjath Goel, Managing Director of MRG Group, remarked, “The 25 bps cut to 5.25% signals a clear shift towards an accommodative cycle and comes at the right time. Lower home-loan rates will directly improve EMI affordability and boost sentiment, especially among end users and upgrade buyers in Gurugram’s luxury housing market. Even this marginal reduction can accelerate conversions and strengthen demand. We expect this move to propel conversions in the coming quarter and further strengthen real estate’s position as a preferred long-term wealth-creation asset heading into 2026.”

Mr. Salil Kumar, Director of Marketing and Business Management at CRC Group, said, “The reduction in the repo rate to 5.25% is a timely and encouraging step for the real estate sector. As developers, we see this move giving homebuyers much-needed confidence, especially young families and first-time purchasers who closely watch interest rate trends. With EMIs expected to ease, we foresee a clear rise in serious enquiries and a more steady improvement in overall sales momentum. This decision will support market stability and motivate more buyers to move forward in their homeownership journey.”

In conclusion, the RBI’s repo rate cut to 5.25% is a significant step that is expected to have a positive ripple effect across the real estate sector. It is likely to boost demand, improve affordability, and enhance market confidence, setting the stage for a robust 2026.