RBI’s 50 bps Rate Cut to Boost Housing Sales in Major Cities
The Reserve Bank of India’s 50 basis points repo rate cut is expected to significantly boost housing sales, particularly in the ₹2–5 crore segment, by lowering home loan rates and improving affordability.
RbiHousing SalesReal EstateRepo RateHome LoansReal Estate PuneJun 09, 2025
The policy easing is timely. With this rate cut, banks are expected to lower home loan rates to sub-8% levels, making home ownership more affordable and unlocking pent-up demand across major metros and tier-1 cities. According to ANAROCK, homes priced between ₹1.5 crore and ₹3.5 crore accounted for nearly 25% of overall housing sales in India’s top 7 cities in Q1 2025, up from 18% two years ago. The ₹2–5 crore bracket has emerged as the fastest-growing price segment.
Mr. Ravi Aggarwal, Co-Founder & Managing Director, Signature Global, commented, “The RBI’s decisive step will play a pivotal role in driving sales across the ₹2–5 crore segment, which is fast becoming the sweet spot for urban homebuyers. With improved affordability, greater financial confidence, and increasing preference for well-connected, premium residential offerings, we expect a strong sales surge in the coming quarters.”
Key micro-markets such as Dwarka Expressway and Southern Peripheral Road & South of Gurugram in Gurugram, Thane and Powai in Mumbai, North Bengaluru, and emerging hubs in Pune and Hyderabad are expected to see a significant increase in walk-ins, bookings, and closures in the coming quarters. These areas have seen a rise in launches in the ₹2–5 crore price band, with developers introducing upgraded offerings featuring larger floor plates, modern amenities, green ratings, and flexible payment options, all of which align with evolving buyer preferences.
The affordability equation has shifted strongly in favor of buyers. For a ₹2.5 crore home loan, the reduction in interest rates can result in total savings of ₹35–40 lakh over a 20-year tenure. Monthly EMIs could drop by ₹10,000–₹12,000, depending on loan terms and lender rates. This not only enhances financial comfort but also accelerates the closure of deals, improving demand velocity and shortening the purchase cycle, particularly in the mid-income and premium homebuyer category.
Residential sales across India’s top 7 cities stood at approximately 1.25 lakh units in Q1 2025, according to Knight Frank, marking a 9% year-over-year growth. New launches increased by 7% in the same quarter, with nearly 30% of new supply priced above ₹2 crore. Home loan inquiries saw a 12% increase in April–May 2025, as per CRIF High Mark, signaling strong buyer intent ahead of the rate transmission. The real estate sector’s share in India’s GDP is projected to grow from 7.3% in 2023 to over 10% by 2030, driven by urban housing demand and infrastructure-led expansion.
The RBI’s rate cut is likely to be the most significant trigger for a housing-led consumption rebound in 2025. With strong fundamentals—rising disposable incomes, robust infrastructure growth, and a demographic advantage—the ₹2–5 crore housing category is poised to lead the next growth cycle. As lenders begin transmitting the lower rates and developers respond with premium, ready-to-move, and nearing-completion inventory, the market is expected to witness one of the most sustained housing sales rallies in recent years.
Frequently Asked Questions
What is the impact of the RBI's 50 bps rate cut on home loan rates?
The RBI's 50 basis points rate cut is expected to lower home loan rates to sub-8% levels, making home ownership more affordable for buyers in the ₹2–5 crore segment.
Which price segment is seeing the most growth in the housing market?
The ₹2–5 crore price segment is witnessing the fastest growth, accounting for nearly 25% of overall housing sales in India’s top 7 cities in Q1 2025.
What are the key micro-markets expected to benefit from this rate cut?
Key micro-markets such as Dwarka Expressway and Southern Peripheral Road in Gurugram, Thane and Powai in Mumbai, North Bengaluru, and emerging hubs in Pune and Hyderabad are expected to see significant increases in walk-ins, bookings, and closures.
How much can a buyer save on a ₹2.5 crore home loan due to the rate cut?
A buyer can save ₹35–40 lakh over a 20-year tenure and ₹10,000–₹12,000 per month in EMIs, depending on loan terms and lender rates.
What is the projected growth of the real estate sector in India's GDP?
The real estate sector’s share in India’s GDP is projected to grow from 7.3% in 2023 to over 10% by 2030, driven by urban housing demand and infrastructure-led expansion.
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