NEW DELHI: The RBI’s 25 bps repo rate cut is welcomed by the real estate sector, seen as enhancing the appeal for homebuyers, especially in affordable and mid-income segments that are sensitive to interest rates. A cut in repo rate, which is expected to lower interest rates on loans, comes in the backdrop of rising property prices.
Anuj Puri, Chairman of ANAROCK Group said that with average housing prices across the top 7 cities having risen by notable double-digits (approx. 10%) in 2025, this rate cut provides a critical cushion to affordability, potentially bringing home loan interest rates to more attractive levels. “This can encourage aspiring homebuyers who had paused their decisions due to price hikes to finally take the plunge. The rate cut is a distinct sentiment multiplier for year-end sales,” added Puri.
However, Puri feels that the real impact hinges on the effective transmission of these benefits. If banks swiftly pass on this rate cut to borrowers, we anticipate a renewed surge in sales velocity carrying firmly into Q1 2026, said Puri.
The Reserve Bank of India (RBI) on Friday announced slashing its repo rate by 25 basis points from 5.5 percent to 5.25 percent, the lowest in over three years. A cut in repo rate lowers the cost of borrowing for commercial banks, leading to lower interest rates on loans, including home loans.
Samantak Das, Chief Economist and Head of Research & REIS, India at JLL said that for the residential sector, the repo rate cut is a direct boost to affordability which has been a growing concern amid rising property prices. “We have been observing price resistance in the affordable and mid-segment housing categories, with our estimates projecting residential sales in 2025 to be 8-9% down from last year's robust 300,000+ units (in the top seven markets of India),” added Das.
He stated that given the high penetration of external benchmark-linked loans, the transmission to homebuyers is expected to be quick, providing tangible EMI relief that directly addresses this affordability challenge. For developers, this final easing bullet significantly lowers the cost of capital, encouraging accelerated execution of planned inventory, particularly in the affordable housing segment.
Amit Jain, Chairman and Managing Director, Arkade Developers said that the fresh rate cut comes at a time when the Indian economy displays a rare “Goldilocks” balance - inflation at multi year lows and growth running strong. Another positive signal is GDP growth projection revised upwards to 7.3%.
“This move when combined with fresh measures to infuse liquidity via open market operations and a foreign exchange swap facility, suggests the central bank is opting for a pro growth steer. Underlying this is a clear objective to make credit cheaper, encourage borrowing by households and businesses and revive demand for investment, consumption and expansion. This policy shift creates a more conducive environment for expansion, capex and fresh investments and could strengthen demand across housing segments in the coming quarters,” added Jain.
Quick Reactions From Industry
Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE: The RBI MPC's decision to slash the repo rate by 25 basis points reflects its focus on improving the consumption in the economy. This is likely to push the banks to transmit previous rate cuts more aggressively and shift towards a more growth-supportive stance. For real estate, this is expected to boost the demand and strengthen investment sentiment across segments. For home loan borrowers, this might bring a tangible relief as floating-rate EMIs will ease," said
Piyush Bothra, Co-Founder & CFO, Square Yards: The 25-basis point cut in the repo rate is a bold and welcome move in the current global macro environment. Despite the sliding rupee and other headwinds, this cut is a very strong signal by the RBI about the strength of the Indian economy and its decoupling from the rest of the world macro. This cut offers a meaningful boost to the real estate sector, reinforcing affordability at a time when buyer activity is already strengthening. With inflation well-managed, growth projections improving, and reforms sustaining consumption, the rate reduction builds positively on the earlier easing undertaken this year.
Pradeep Aggarwal, Founder & Chairman, Signature Global (India): The real estate sector has remained on a steady growth trajectory, as the prior cumulative repo-rate reduction of 100 bps by the RBI, coupled with income-tax relief given in the Union Budget and GST rate rationalisation earlier this year, has not only made home loans cheaper but has also significantly improved overall affordability for homebuyers. This latest rate cut is expected to further strengthen market sentiment, enhance purchasing power, and support continued growth in housing demand across key segments, keeping real estate a preferred long-term asset class.
Amit Goyal, Managing Director, India Sotheby’s International Realty: The RBI’s 25-basis-point repo cut comes at the right time. Real estate is capital intensive, and after years of elevated construction costs, lower rates offer meaningful relief. Cheaper credit boosts confidence—from homebuyers to institutional investors and should drive demand, transactions, and price stability. With India posting 8.2 percent growth in Q2, the rate cut is a strong sail forward, reinforcing liquidity and sentiment in an already resilient economy.
Samir Jasuja, Founder and CEO, PropEquity: Lower borrowing costs provides a cushion to homebuyers against rising property prices thereby accelerating decision-making among fence-sitters. Developers, too, are responding to this evolving demand landscape. A noticeable increase in new launches within the ₹2–5 crore segment indicates strategic alignment with buyer preferences. This segment, in particular, stands to benefit significantly from the consistent reduction in home loan rates, which is likely to further support real estate momentum.
Yateesh Wahaal, Director, M3M India: Lower borrowing costs will significantly improve home-buyer affordability and further uplift sentiment in a market already witnessing strong end-user traction. For developers, the reduction in capital costs provides much-needed headroom for faster project execution, product innovation, and stronger liquidity management. This policy direction underscores the RBI’s calibrated approach—supporting economic expansion without compromising financial stability. We expect this rate cut to unlock renewed momentum across both residential and commercial segments, catalysing investments and long-term housing commitments. Overall, it is a constructive and growth-aligned move that strengthens the sector’s outlook for 2026 and beyond.
Amrita Gupta, Director, Manglam Group: The RBI’s decision to cut policy rates will significantly support housing demand in Tier 2 and Tier 3 cities, where affordability plays a central role in purchase decisions and homebuyers are particularly sensitive to EMI movement. Improved borrowing costs are expected to bring greater confidence to end users and accelerate decision-making among families who have been evaluating long-term ownership. These markets have already seen strong growth in plotted developments, mid-range apartments and integrated townships, and a lower interest rate environment could help deepen demand further and widen participation.
Ramani Sastri, Chairman & MD, Sterling Developers: We welcome the decision of repo rate cut as it would be highly encouraging for homebuyers and developers alike, potentially boosting affordability and investments in the sector. The rate cut would also strengthen market confidence and also act as a strong signal of policy support for the real estate sector and the broader economy. However, for the intended benefits to materialize, the transmission of the reduced rates must also be faster, ultimately benefiting the real estate sector and contributing positively to overall economic expansion.
Abhijeet Maheshwari, CEO, Piramal Realty: The RBI’s 25-basis-point rate cut provides welcome support to overall housing affordability and home buying confidence, especially as inflation remains at comfortable levels. With the economy showing a steady momentum, this move is expected to ease borrowing costs and strengthen purchase intent in the premium and luxury segment, where home buyers are increasingly prioritising long-term value and asset stability. For key markets like Mumbai, we anticipate a healthy rise in enquiries and faster decision-making as consumers respond to more favourable financing conditions.
Parveen Jain, President, NAREDCO: This reduction (in repo rate) will improve liquidity and encourage new investment across several sectors. For real estate, lower interest rates make home loans more affordable, which supports homebuyers and strengthens demand. The positive impact will extend to allied industries as well, helping generate more employment. In Tier 2 and Tier 3 cities, this move can further boost interest among both developers and buyers. Overall, the cut provides additional support to the broader economic recovery.
Nitesh Kumar, MD& CEO, Emami Realty: When combined with the 150 bps cumulative reduction since February 2025, this is no longer just monetary easing; it is the decisive moment that restores genuine housing affordability for the salaried middle class after three long years of high EMIs. Loan eligibility has jumped 8–10% for the same income. Realty sector is witnessing the tipping point. Since the October cut, footfalls and serious inquiries have surged 25–30%. Bookings in the affordable and mid segment that is the true heartbeat of Indian housing are already up sharply. This decision will turn that momentum into a full-blown revival.
Vimal Nadar, National Director & Head, Research at Colliers India: For the real estate sector, especially the residential segment, this rate cut builds on the momentum created during the recent festive season and GST rationalization of key construction materials. Lower borrowing costs will further improve affordability and buyer sentiment, particularly in affordable & mid-income housing segments. Additionally, steady growth in average income levels can potentially drive property enquiries and boost housing sales in the next few quarters.
Uddhav Poddar, CMD, Bhumika Group: The RBI’s 25 bps rate cut could not have come at a more decisive moment for the housing market. Buyer sentiment typically strengthens toward year-end, and this reduction will make home loans more comfortable for buyers. In NCR, where demand for larger formats and luxury housing is already surging, we expect accelerated conversions in Q4. Looking ahead to 2026, this softer rate regime will support a healthier, more sustained growth cycle across NCR’s residential corridors.
Pankaj Jain, Founder and CMD, SPJ Group: At a time when the real estate sector is growing exponentially, the RBI bringing the repo rate to 5.25% will give a major boost to the sector. Lower borrowing costs will make home loans more affordable, thereby encouraging more buyers to enter the market. Alongside, the move offers a stronger case for developers to expand into untapped micro-markets. Entering 2026, we foresee a more balanced, demand-driven ecosystem where both residential and commercial segments grow in tandem.
Binitha Dalal, Founder and Managing Partner, Mt. K Kapital: It will increase purchasing power in the hands of consumers and allow households to access loans, including home, car and personal loans, at more comfortable rates. This is likely to to boost the housing sales and support the momentum for the last quarter of the financial year. The reduction in borrowing costs also helps businesses maintain growth plans and continue investing confidently in both domestic and export markets, especially in the absence of a trade agreement with the United States. Additionally, the move supports the strength of the rupee and reinforces stability in the economic environment, contributing to broader financial confidence.
