Real Estate Hails RBI’s Double Repo Rate Cut, Homebuyers to Benefit

New Delhi, June 6, 2025: In a surprise move hailed by the real estate sector and will benefit homebuyers, the Reserve Bank of India (RBI) cut the repo rate for a third consecutive time by 50 basis points to 5.5 per cent on Friday.

The Central bank reduced the key lending rate by 50 bps—double the market expectation of 25 bps—to boost domestic demand, particularly private consumption and rural spending. The RBI wants to “shield” India from rising global bond yields, volatile crude oil prices and US President Donald Trump’s tariff shock.

“The rate cut is a proactive step to shield India’s growth trajectory from evolving global headwinds,” RBI governor Sanjay Malhotra said.

The RBI also reduced the cash reserve ratio (CRR) by 100 bps from four to three per cent, which would release primary liquidity of about INR 2.5 lakh crore into the banking system by November-end, Malhotra said.

The RBI also retained the GDP growth forecast of 6.5 per cent for this fiscal and revised the inflation outlook for FY26 from 4 per cent to 3.7 per cent.

The repo rate will benefit homebuyers, particularly first-time buyers and those targeting affordable housing. The real estate sector will also benefit from the reduced cost of borrowing, which will ease the financial burden, boost demand, help in the sale of unsold inventory and encourage builders to take on new projects.

“The RBI’s decision to cut the repo rate by 50 basis points is a significant move that will have a positive impact on the economy and various sectors, including real estate. This reduction is expected to lead to lower borrowing costs, increased liquidity and enhanced consumer spending power,” said Anshuman Magazine, Chairman and CEO-India, South-East Asia, Middle East & Africa, CBRE.

“For the real estate sector, this move is particularly beneficial as it will make home loans more affordable, stimulating demand and driving growth. The reduced interest rates will also encourage developers to take on new projects, boosting construction activity and creating employment opportunities.”

Niranjan Hiranandani, Chairman, NAREDCO and Hiranandani Group, said that the repo rate and CRR reduction “mark a pivotal intervention to bolster GDP growth amid a fragile global economic environment”.

“For the real estate sector, the rate reduction is set to bolster credit lending, accelerate buying velocity and enhance development momentum. The resulting decline in home loan interest rates will directly benefit homebuyers by improving affordability and cushioning their financial commitments.”

He added, “Lower mortgage rates make home ownership more attainable, driving greater demand and fostering stronger sales indices. Additionally, this move could spur refinancing activity and strengthen investment interest in branded properties known for their attractive returns, particularly among Grade A developers.”

While the dynamics of real estate are influenced by broader economic factors, he further added, RBI’s commitment to maintaining a lower rate environment will rekindle market confidence, enabling growth in portfolio expansion and refinancing activities.

Anshul Jain, CEO, India, SEA & APAC Tenant Representation, Cushman & Wakefield, said, “The RBI has today delivered a boost to consumer/household sentiment with a 50 bps cut, seen positive for the real estate sector, particularly housing. With this, the cumulative cut for this year of one per cent is indeed going to help translate into lower EMIs and relatively better affordability, thereby helping the mid-segment housing across top-tier cities.”

He added, “Lower borrowing costs will significantly improve the viability of capital-intensive development, particularly in high-growth sectors such as global capability centres, data centres and the industrial and logistics segment. For domestic and global investors alike, the move further cements India’s position as a compelling destination for capital deployment, innovation and large-scale infrastructure creation.” 

Shekhar G Patel, President, CREDAI, welcomed the RBI’s decision as “a bold and timely step toward stimulating domestic demand”.

“With CPI inflation easing to a four-year low of 3.2 per cent, well below the 4 per cent target, this move reflects the central bank’s confidence in macroeconomic stability and signals a clear shift toward growth-oriented policymaking.”

The decision “comes at a pivotal time as India, now the world’s fourth-largest economy, is witnessing strong real estate momentum across metros as well as Tier 2 and Tier 3 cities. Lower lending rates will directly enhance home loan affordability, particularly in interest-sensitive categories, like mid-income and affordable housing. Reduced EMIs are expected to significantly improve buyer sentiment and encourage first-time homebuyers to enter the market.”

He added that the rate cut is also likely to unlock demand across consumption-driven sectors, revive private investment and reinforce India’s economic momentum through FY26.

“The cumulative 100 basis point reduction over the last six months is a welcome and strategic move. We are particularly optimistic about its impact on the affordable housing sector, which has been under pressure on both the demand and supply sides. Lower interest rates will increase homebuyer affordability and improve the financial viability of affordable housing projects.”

Anuj Puri, Chairman, ANAROCK Group, said that the repo rate cut “effectively lowers the cost of borrowing, making home loan EMIs easier on the pocket and thereby directly improving affordability for buyers”.

“This can potentially boost demand in the Indian real estate sector, especially in affordable and mid-income segments. Affordable housing faced the sharpest pandemic fallout with sales and new launches shrinking in the top seven cities.”
 
According to ANAROCK data, affordable housing sales share plummeted from 38 per cent in 2019 to 18 per cent in 2024 while its supply share dropped from 40 per cent to 16 per cent in the same period. However, a 19 per cent dip in unsold stock hints at sustained demand led by end-users.

“It will also lower developers’ borrowing costs. It is sincerely hoped that banks pass on the benefits of this move seamlessly to borrowers,” he added.

“The reduction in CRR will help boost liquidity in the banking system, which means that banks have more funds to lend. Developers will be able to access more capital for their projects, and this can positively impact project completion timelines. It also gives banks the option to reduce home loan interest rates, which will again positively impact sentiment in the affordable and mid-income segments.”

While the rate cut is a strong positive for real estate, especially for affordable housing, “much now depends on how well it can adapt to higher input costs and ongoing global uncertainties. Continued policy support and a shift to domestic sourcing could be critical for sustained growth”.

Anurag Mathur, CEO, Savills India, said, “The rate cut is a much-needed relief for homebuyers in the situation of dipping housing sales recently, especially in the affordable segment. The rate cut will lead to reduced borrowing costs that would encourage credit flow by making home loans more affordable, thereby improving housing affordability and stimulating end-user demand.”

According to him, the accommodation environment is also likely to attract investor interest, potentially driving momentum in both residential and commercial real estate markets. Additionally, reduced borrowing costs will likely accelerate construction and infrastructure development, further reinforcing sectoral growth while supporting employment generation.

“Developers would benefit from eased financial burdens, which could lead to an acceleration in new construction projects, thereby enhancing new launches.” 

Sanjay Dutt, MD and CEO, Tata Realty and Infrastructure, said, “We welcome RBI’s decision to frontload the interest rate cuts. The 50 bps cut in repo rate, over and above the reduction of 50 bps since February 2025, augurs very well for the real estate sector. With inflation under control and a cut in personal income taxes announced in the last Budget, this rate cut is a further shot in the arm for boosting the demand on the residential side. EMIs will be lower.”

In an era of rising construction costs and an increase in the cost of doing business, he added, “the rate cut will reduce borrowing costs of developers. We hope the rate cut is quickly translated through a reduction in Bank MCLR’s, resulting in a reduction in the long-term borrowing costs. Surplus domestic liquidity situation has already helped reduce short-term borrowing costs significantly”.

Pradeep Aggarwal, Founder and Chairman, Signature Global (India) Ltd, said, “The twin reduction, the repo rate by 50 basis points to 5.50 per cent and the cash reserve ratio by 100 basis points to three per cent, provides significant relief for homebuyers. Lower borrowing costs will make home loans more affordable, thereby encouraging more buyers to enter the market.”

He added, “The reduction in CRR is expected to infuse significant liquidity in the banking system, which will prompt banks to lend even more.”

According to him, the demand for mid and premium segment homes has already been on the rise following previous rate cuts, and this larger reduction will further accelerate interest from both homebuyers and investors.

“Additionally, the positive market sentiment around the possibility of further rate cuts this financial year bodes well for the real estate sector, paving the way for sustained growth and renewed confidence in the housing market.”

Manoj Gaur, CMD, Gaurs Group, said, “The RBI’s decision to reduce the repo rate by 50 bps will add new vigour to the real estate sector. Not only will it make homeownership affordable and boost buyers’ sentiments but also add new vigour to the economy which in turn will augur well for both residential and commercial realty. This could as well signal the beginning of a new low-interest regime.”

Amit Modi, Director, County Group, said, “The reduction in repo rate by 50 bps will significantly boost the real estate sector. But its ramification goes wider. The move also signals confidence in the country’s economy, easing inflationary pressures and a positive outlook for the future.”

Due to the CRR cut, about INR 2.5 lakh crore will be released to the banking system, which will not only boost consumption but also benefit the residential and commercial realty segments.

Sahil Agarwal, CEO, Nimbus Realty, said, “The RBI’s 50 bps repo rate cut will catalyse the real estate sector’s growth. Combined with the phased 100 bps CRR cut, it will infuse liquidity into the banking system, lowering borrowing costs and expanding credit availability for homebuyers. For instance, on a INR 1 crore home loan (20-year tenure), borrowers can now save up to INR 6,000 per month.”

Deepak Kapoor, Director, Gulshan Group, said, “The decision to reduce the repo rate by 50 bps takes the total decrease in the repo rate by one per cent in a short span of six months. For the real estate sector, it will translate into an increase in new homeownership numbers.”

Sandeep Chhillar, Founder and Chairman, Landmark Group, said, “The RBI’s decision to lower the repo rate by 50 basis points sends a strong pro-growth signal and undoubtedly benefits the real estate sector. The decision will make the home-buying process for first-time homebuyers increasingly accessible.”

He added, “The move is expected to further propel the demand, sustain buyer interest and create a favourable environment for continued growth across the housing market.”

Amish Bhutani, MD, Group 108, said that the RBI’s third consecutive repo rate “signals continued confidence in India’s economic growth story. This decisive move is set to unlock greater capital inflow, especially into high-impact sectors like real estate.

“Wherein, the commercial segment stands to benefit the most from easier financing. At a time when the country seeks robust economic growth, this rate cut would act as a timely catalyst, which would help attain the same.”
  

Pankaj Jain, Founder and CMD, SPJ Group, said, “At a time when the real estate sector is growing exponentially, the RBI bringing down the repo rate to 5.5 per cent 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.”

Besides, the move “offers a stronger case for developers to expand in untapped micro-markets. As the demand for premium homes rises, the deduction will pave the way for sustained growth.”

Uddhav Poddar, CMD, Bhumika Group, said, “The 50 bps repo rate cut signals a strong push toward economic strengthening and offers timely relief to the real estate sector, particularly commercial real estate. By lowering borrowing costs, the move enhances capital accessibility, attracts a wider investor base and supports new avenues of expansion.”
Besides, this policy adjustment serves as a much-needed counterbalance, likely to accelerate commercial project execution, he added. “We remain optimistic about the sector’s growth trajectory and anticipate continued policy support to sustain this positive momentum.”

Ankit Kansal, MD, Director 360 Realtors, said, “The industry was mulling a rate cut but didn’t expect a slash of 50 basis points. This is indeed a pleasant surprise. With the current rate reduction, we have achieved a 100-basis point correction in 2025. While home loans will be affordable, developers can access cheaper credit, entailing a dual positive impact on the sector.”

Liquidity will further a get a shot in the arm, he added. “For a home loan of INR 50 lakh (20-year period), we can expect a reduction to the tune to INR 3,000 in EMI disbursing. For bigger values such as INR 1-INR 1.5 crore, the reduction can be to the tune to INR 6,000-INR 9,500. This is a substantive value, especially for mid-income households.”

Prateek Tiwari, MD, Prateek Group, said, “The RBI has infused enthusiasm in the real estate sector. The move will inject greater confidence in the already-booming housing segment as lower interest rates will significantly reduce the cost of borrowing. This, in turn, will encourage developers to come up with new launches, sustaining the market’s growth. Hence, the sector is all set to reap its benefits.”

Kushagr Ansal, Director, Ansal Housing, “The 50 bps repo rate cut by RBI, along with the shift to a neutral stance, is a welcome move that signals a positive turn for the economy. Lower borrowing costs will not only improve homebuyer sentiment but also accelerate housing demand, especially in the mid and affordable segments.” T

The decision is “a strong confidence booster for the real estate sector, and we anticipate a renewed momentum in both residential and commercial investment”.

Sanjay Sharma, Director, SKA Group, said, “The repo rate cut brings a wave of optimism to the real estate market. The 50 bps cut reflects the RBI’s clear intent to stimulate economic activity, which will not only give relief to homebuyers but will also boost demand across the real estate sector. Especially, when the market is on an upward trajectory, we believe this decision will sustain its momentum.”

Neeraj Sharma, MD, Escon Infra Realtors, said, “The repo rate is a significant move that will pave the way for the real estate sector. The reduction of 50 basis points will fuel much-needed momentum, resulting in lower EMIs for homebuyers and reduced borrowing costs for developers to launch more projects and meet the nation’s housing demand.”

Mayank Jain, CEO, KREEVA, said, “The RBI’s bold move is a booster for the real estate sector. The reduced borrowing cost will not only strengthen homebuyers’ sentiments but also help in easing the liquidity flow in the market.”

In light of significant market volatility and real estate witnessing a surge in the investment flow, this proactive approach signals the Central bank’s strong commitment to thrust economic momentum and boost investor confidence, he added.

Ashwinder R Singh, CII Real Estate Committee, vice-chairman and CEO, BCD Group and adviser, NAR India, said, “The 50 basis points cut will have a twofold impact on real estate. On one hand, it eases borrowing costs for end-users, especially in the mid and upper-mid segments, where affordability sensitivity remains high. On the other, it brings down the cost of capital for developers managing ongoing and upcoming projects.”

But more importantly, “in an environment where real estate demand is already firm, this move helps sustain momentum without overheating the market. The key will be transmission speed by lenders and how much of this benefit flows down to the consumer”.

Surender Kaushik, Founder and MD, ARIPL, said, “The RBI’s decision strongly aligns with the real estate sector as a reduction in home loan rates will appeal to buyers. While developers may seize this opportunity to scale up projects in new growth corridors. Hence, the announcement will add a new vigour to the sector.”

Piyush Kansal, Executive Director, Royale Estate Group, said, “The RBI’s decision will ease financial pressure on homebuyers and developers alike, prompting more individuals to invest in property purchase and driving demand across the housing sector. We expect this to spur stronger sales activity and foster sustained stability and growth in the market moving forward.”

Sehaj Chawla, MD, TREVOC Group, said, “For the real estate sector, this move is expected to unlock greater housing demand as lower interest rates significantly reduce the cost of borrowing. At a time when consumer sentiment is gradually strengthening, this could act as a powerful catalyst, encouraging more fence-sitters to take the plunge into property ownership and further energising the sector’s growth.”

Viineet Chellani, Founder and CEO, Asset Deals, says, “The RBI’s repo rate cut is a timely and strategic move to strengthen economic stability and revive sectoral growth. This 50 basis points reduction will provide much-needed relief to homebuyers and significantly boost demand across the real estate market.”

Lower borrowing costs and improved liquidity will enable faster project execution and better financial planning, he added. “We believe this rate cut lays a solid foundation for a stronger recovery in real estate as well as the broader economy.”

Prakash Mehta, CMD, Ocus Group, said, “For the real estate sector, it’s a timely move that will ease borrowing costs, improve liquidity and support faster project execution. This step is expected to lift market sentiment and reinforce long-term sectoral growth. It also enhances financial flexibility for developers and signals positive momentum for the overall economy.”

Manit Sethi, Director, Excentia Infra, says, “The RBI’s bold move delivers a powerful boost to both the economy and the housing market. Developers will benefit from improved liquidity, speeding up project launches and deliveries. With home loan rates likely to fall further, affordability will improve, especially for first-time homebuyers. Together, these factors set the stage for robust growth and a vibrant real estate market in the months ahead.”

Umang Jindal, CEO, Homeland Group, said, “The 50 bps drop in interest rates announced by RBI augurs well for the real estate sector. In effect, it takes the total reduction to one per cent in the last six months, which is a huge decrease. Coupled with a staggered CRR cut of 100 bps, it translates into not only low interest rates but also an increase in the total volume of home loans that can be released by the banks.”

Yash Miglani, MD, Migsun Group, said, “For homebuyers, this translates into more affordable EMIs and improved access to housing, especially crucial for first-time buyers in the current market. For developers, it eases financing, supports new launches and improves overall liquidity.”

Prateek Mittal, ED, Sushma Group, said, “The 50 bps cut in repo rate will pave the way for increased capital flow into key sectors like real estate. Lower interest rates will offer better access to funds, broader investor appeal and faster project rollouts. Particularly, at a time when inflation is easing, the move is likely to expedite the sector’s development.” 

Harvinder Singh Sikka, MD, Sikka Group, said, “The move while making home ownership cheaper for the buyers will also reduce the interest rates on project financing. But more than sheer numbers, the major impact will be on the market sentiments as the RBI’s announcement also points towards a resilient economy growing from strength to strength.”

Sakshee Katiyal, Chairperson, Home & Soul, said, “The RBI’s decision to cut the repo rate to 5.5% delivers a firm boost to both the broader economy and the real estate sector. This move will significantly benefit the luxury housing segment, particularly in Tier 2 and 3 cities, where demand for the residential segment is on the rise and development activity is gaining pace.”

By improving the market sentiment, she added, the rate cut is set to drive sustained demand across both urban and emerging suburban markets.

Ashwani Kumar, Pyramid Infratech, said, “The RBI’s move will strengthen buyer sentiment in the real estate market. Lower interest rates will enhance home affordability, especially for first-time buyers, and ease the financial burden on developers. This policy shift is expected to accelerate housing demand and contribute positively to the sector’s recovery and long-term momentum.”

Saurab Saharan, group MD, HCBS Developments, said, “The rate cut will act as a catalyst for the real estate sector by improving affordability for homebuyers and unlocking fresh opportunities for developers. Lower borrowing costs will enhance project feasibility, ease funding challenges and support timely execution.”

Nayan Raheja, Director, Better Choice Realtors, said, “Considering the global economic outlook, this third consecutive reduction will continue boosting the real estate market. With the Indian economy showing stability, this move will encourage borrowing, prompting more individuals to invest in property purchase and driving demand in the housing sector.”

Sunny Katyal, Co Founder, Investors Clinic, said, The 50 bps reduction in the repo rate will breathe new life into the real estate market. Amidst the surge in demand for both commercial and residential properties, this reduction is a significant move that will take the sector’s growth to new heights.”

The decision will “further ease financing costs for developers, thus benefiting ongoing and upcoming projects. Hence, we foresee increased buyer and investor enthusiasm alongside more competitive lending options from financial institutions.”

Salil Kumar, Director, Marketing and Business Management, CRC Group, said, “The RBI’s repo rate adjustments profoundly impact housing affordability and loan repayment terms, and the 50 bps rate cut strengthens this sentiment. At a time when the Indian economy is strengthening, the one per cent deduction will maintain the real estate sector’s growth. This will further ease financing costs for developers, thus benefiting ongoing and upcoming projects.”

Umesh Rathore, V-P Sales and Marketing, VVIP Group, says, “We welcome the decision of the RBI to cut down the repo rate by 50 basis points to boost overall housing demand and improve sales performance. In the current economic environment, this reduction is going to provide much-needed relief to both homebuyers and developers due to lower borrowing costs and easing liquidity.”

Vishesh Rawat, V-P and Head of Marketing, Sales and CRM, M2K Group, said, “The RBI’s bold move provides a much-needed stimulus to both the economy and the housing market. The one per cent deduction is expected to give a major boost to homebuyers’ confidence as they will be able to secure home loans at a lower rate. On the other hand, developers will have the benefit of lower borrowing costs, easing their financing pressures. Amid the growing demand for premium housing, this announcement will definitely accelerate the sector’s growth.”

Saurabh Shankar Seth, President Sales and Marketing, AIPL, said, “The RBI’s third successive 50bps repo rate cut is a strategic step to stimulate growth, offering a clear boost to the residential real estate market. At a time when the sector is booming, this move enhances confidence among both homebuyers and developers.”

Dinesh Gupta, President, CREDAI, western UP, believes that the CRR reduction will “increase the liquidity in the banking system, which will lead to more funds for construction, and projects will be completed on time. “This is a matter of relief for the entire industry.”

Suresh Garg, CMD, Nirala World, mentioned that it was expected due to the economic scenario. “Post this, banks will also reduce interest rates. This will not only reduce EMIs but also increase the eligibility of the new loan borrowers. This will enable them to plan a new and bigger house for themselves, which will increase the demand for houses.”

Pankaj Kumar Jain, Director, KW Group, said, “The RBI has done this to stimulate the domestic private consumption. EMIs will come down and home loans will be available at a better rate for new homebuyers. It will be a big relief for buyers as the property prices are going up.”

Shailendra Sharma, Chairman, Renox Group, said that the RBI’s move will give new energy to the housing sector, especially to families planning to buy a house on a limited budget. “Lower interest rates will provide relief in their monthly instalments and increase their purchasing power.”

Another major impact of this decision could be that banks now show more flexibility and reduce home loan interest rates. This will directly benefit middle-class families.

Lieutenant Colonel Ashwani Nagpal (Retd.), COO, Diligent Builders, said, “The repo rate cut is a win-win situation for all. The benefits of lower interest rates are not only for buyers but also for developers as their financing costs will go down. This will increase affordability for home buyers and may also boost new launches.”

According to Himanshu Garg, Director, RG Group, “It’s a welcome move by the RBI. A 50 bps cut was surprising. However, it has happened due to a change in its policy to remain neutral. The RBI reduced the repo rate by 100 bps in the last three monetary policy reviews, and now banks have to reciprocate and bring down the rates at the earliest.”