RBI's Rate Cut Boosts Homebuyers and Real Estate Market
The Reserve Bank of India's recent rate cut is expected to significantly benefit homebuyers and the real estate sector, according to industry leaders. Experts predict that reduced EMIs and lower interest burdens will spur more spending and economic growth.
Rbi Rate CutReal EstateHomebuyersGdp GrowthEmisReal EstateJun 06, 2025
Amit Kumar Sinha, MD & CEO of Mahindra Lifespace Developers, told CNBC-TV18 that the move is “great news for homebuyers” and is likely to lift sentiment across consumer categories. “I am hoping the repo rate cut will be passed on to consumers by all the banks,” he said.
With EMIs coming down for housing, auto, and other consumer durables, the reduced interest burden is expected to spur more spending and stimulate GDP growth, he added. Sinha also pointed out that corporates stand to gain meaningfully from the rate cut. “The interest payout will come down significantly, and that allows us to do more. We can do more capital allocation toward projects that have higher returns,” he said. He noted that clients in Mahindra’s industrial business are also planning expansion as borrowing becomes cheaper, leading to a potential rise in capital expenditure.
Rajat Kathuria, CEO of Signature Global, said that real estate, being a capital-intensive sector, is particularly sensitive to financing costs. “All these policy initiatives by the government, whether it is in terms of the earlier rate cuts, tax benefits in the last budget, and today’s 50 basis point rate cut, is a big boost for the customer who really sees a big impact on their affordability of homes,” Kathuria said.
He added that the improvement in affordability spans across affordable, mid-income, and even premium housing segments. Kathuria noted that despite some improvement in supply in recent years, India remains significantly underdeveloped in housing compared to countries like China. “In top seven to eight cities, after two to three good years we are supplying about half a million new homes. If we compare that to China, it will be probably doing 10 times more new homes,” he pointed out.
Both leaders agreed that the RBI’s move will not only support demand in the housing market but also give a strong push to broader economic activity.
Frequently Asked Questions
What is the impact of the RBI's rate cut on homebuyers?
The RBI's rate cut will reduce EMIs for homebuyers, making home ownership more affordable and potentially increasing demand in the housing market.
How will the rate cut affect the real estate sector?
The rate cut will lower financing costs for real estate developers, making projects more feasible and potentially leading to increased supply of new homes.
What are the broader economic benefits of the rate cut?
The reduced interest burden on loans for housing, auto, and other consumer durables is expected to spur more spending and stimulate GDP growth.
How do corporate entities benefit from the rate cut?
Corporates will see a significant reduction in interest payouts, allowing them to allocate more capital towards high-return projects and expansions.
How does India's housing supply compare to other countries?
India is significantly underdeveloped in housing compared to countries like China. While India supplies about half a million new homes in top cities, China supplies around 10 times more new homes.
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