In line with expectations, the RBI in its first MPC meeting after the Budget on Friday decided to reduce the repo rate by 25 basis points to 6.25%, the first rate cut in nearly five years, following a prolonged cycle of rate hike and stability triggered by global uncertainties. This came in the backdrop of easing inflation and moderation in growth prospects.
The Central Bank, however, maintained confidence on the robustness of domestic economy and projected the GDP growth rate at 6.7% in FY 2025-26.
Welcoming the rate cut, realty experts and consultants said as housing demand had begun to stabilize after witnessing record sales in the last 2-3 years, this rate cut comes at an opportune time and will have a significant bearing on boosting homebuyer sentiments.
“The rate cut along with the recent budgetary announcements related to creation of Urban Challenge Fund and tax reliefs under the new regime are likely to stimulate urban growth and enhance domestic consumption. Higher disposable income and lowering of financing costs stand to benefit homebuyers and developers alike. Furthermore, the recent allocation of Rs 15,000 crore for SWAMIH II fund is likely to expedite completion of stressed projects, boosting liquidity and spur home buying sentiments. Overall, evident tailwinds should boost real estate demand across asset classes in the upcoming quarters,” said Vimal Nadar, Head of Research at Colliers India.
Also Read: RBI Cuts Repo Rate by 25 bps: What should homebuyers do now?
Dhruv Agarwala, Group CEO, Housing.com & Proptiger.com, said the reduction in the key policy rate will lower home loan interest rates, benefiting both prospective buyers and existing borrowers.
“At this critical juncture, in fact, the rate cut will play a crucial role in improving housing affordability in the world’s most populous country, complementing the measures announced in the recently-unveiled Union Budget 2025. Additionally, the repo rate cut, along with the previously-announced reduction in the CRR, will enhance liquidity for developers, positively impacting new supply and accelerating project completions,” he added.
Property consultants said the RBI decision to reduce the repo rate is undeniably a major boost to the homebuyers, particularly for affordable housing buyers.
“Many first-time homebuyers who had been hesitating to take the plunge are likely to make their move now as home loan rates will reduce –
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