Realtors Anticipate Surge in Housing Demand Following Repo Rate Cut
Realtors are optimistic about a rise in housing demand, particularly in the affordable and mid-income segments, following the Reserve Bank of India's (RBI) decision to cut the repo rate by 50 basis points. This move, coupled with recent tax relief, is expected to boost the real estate market.
Repo RateReal EstateHousing DemandMortgage RatesRbiReal Estate NewsJun 07, 2025
Sanjay Dutt, MD and CEO of Tata Realty and Infrastructure, praised the RBI's decision, stating that it augurs well for the realty sector. He expressed hope that banks will pass on the benefits of the repo rate cut to homebuyers at the earliest. Dutt noted that the reduction in the repo rate, combined with lower inflation and tax relief, will lower EMIs, making homeownership more accessible and attractive.
Venkatesh Gopalakrishnan, Director of the Group Promoter's Office and MD of Shapoorji Pallonji Real Estate, echoed similar sentiments. He highlighted that the rate cut is particularly encouraging for the affordable and mid-income housing segments, where demand is highly sensitive to interest rate changes. Gopalakrishnan emphasized that lower EMIs will enhance home loan affordability, prompting more potential buyers to enter the market.
According to many property consultants, housing sales have declined in the January-March quarter of this year due to high base effects and a sharp rise in housing prices over the past three years. However, property developers and consultants are optimistic that the 100-basis-point reduction in the repo rate since February will help reverse this trend and boost sales in the coming months.
Anshuman Magazine, Chairman and CEO of CBRE for India, South-East Asia, Middle East, and Africa, stated that the repo rate reduction is expected to lead to lower borrowing costs, increased liquidity, and enhanced consumer spending power. He added that these factors will collectively contribute to a more robust real estate market.
Niranjan Hiranandani, Chairman of the Hiranandani Group, believes that the rate reduction will bolster credit lending, accelerate buying velocity, and enhance development momentum. Kalyan Chakrabarti, CEO of Emaar India, noted that the policy shift will support homebuyers and developers, while also enhancing liquidity access and fostering robust growth in the industry.
Kamal Khetan, CMD of Sunteck Realty, expects a strong uptick in residential inquiries and conversions as EMIs become more manageable for aspirational buyers. Murali Malayappan, CMD of Shriram Properties, stated that the easing of home loan rates will particularly benefit mid-market homebuyers. Pradeep Aggarwal, Chairman of Signature Global, added that the cut in the repo rate and cash reserve ratio will bring significant relief for homebuyers.
Manik Malik, CFO of BPTP, emphasized that the change in the policy rate will ease borrowing costs, benefiting both developers and homebuyers. He explained that developers will see financial relief through lower borrowing rates, enabling smoother project execution and manageable construction costs. For homebuyers, this reduction in the repo rate translates into lower house loan EMIs, making homeownership more accessible.
Umesh Gowda HA, Chairman of the Sanjeevini Group, highlighted that the RBI's decision will be a big boost for the overall economy and the housing sector. He noted that home loans have already fallen below the 8% mark, and the recent measures will further reduce home loan rates, driving demand for mid-income and affordable homes.
Rattan Hawelia, Chairman of the Hawelia Group, observed that the sale of homes in the National Capital Region (NCR) has witnessed a slowdown in the last couple of months. He believes that the recent reduction in the repo rate, following the last two rate cuts, will definitely boost demand.
Leading housing brokerage firms such as Anarock, Square Yards, PropTiger, The Guardians Real Estate Advisory, InvestoXpert, and InfraMantra are also bullish about the growth prospects after the RBI's decision. Dhruv Agarwala, Group CEO of Housing.com and PropTiger.com, stated that the move is expected to lower borrowing costs and bolster business confidence. He added that in the housing sector, where affordability is critical, especially in the budget segment, a reduction in interest rates will go a long way in sustaining demand.
Anuj Puri, Chairman of Anarock, noted that this can potentially boost demand in the Indian real estate sector, especially in the affordable and mid-income segments. He pointed out that affordable housing faced the sharpest pandemic fallout, with sales and new launches shrinking in the top seven cities.
Ankur Jalan, CEO of AIF Golden Growth Fund, stated that the RBI's move will boost consumption and drive economic growth, benefiting all sectors of the Indian economy. According to the latest RBI data, housing loan outstanding has increased to Rs 30 lakh crore as of April 18, 2025, from Rs 27.41 lakh crore year-on-year.
In summary, the RBI's decision to cut the repo rate by 50 basis points is expected to have a significant positive impact on the real estate sector. This move, coupled with recent tax relief, is anticipated to boost demand for residential properties, particularly in the affordable and mid-income segments. Property developers and consultants are optimistic that this will lead to increased sales and a more robust real estate market in the coming months.
Frequently Asked Questions
What is the repo rate and why is it important for the real estate sector?
The repo rate is the interest rate at which the Reserve Bank of India (RBI) lends money to commercial banks. A reduction in the repo rate typically leads to lower borrowing costs for banks, which can then pass on these savings to homebuyers in the form of lower mortgage rates. This makes home loans more affordable, thereby boosting demand in the real estate sector.
How will the repo rate cut affect homebuyers?
The repo rate cut will reduce the cost of borrowing for homebuyers, leading to lower EMIs. This makes homeownership more affordable and accessible, especially for first-time buyers and those in the affordable and mid-income segments.
What impact will the repo rate cut have on property developers?
The repo rate cut will reduce the borrowing costs for property developers, making it easier for them to finance their projects. This can lead to smoother project execution and potentially lower construction costs, which can be passed on to buyers in the form of more competitive pricing.
How does the repo rate cut affect the overall economy?
A reduction in the repo rate can stimulate economic growth by increasing liquidity, reducing borrowing costs, and enhancing consumer spending power. This can lead to increased investments and higher consumer confidence, benefiting various sectors, including real estate.
What are the expectations for the housing market in the coming months?
Real estate experts and property developers are optimistic that the repo rate cut will boost housing demand, particularly in the affordable and mid-income segments. They expect to see an increase in residential inquiries and conversions, as well as a more robust real estate market in the coming months.
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