The RBI has reduced the repo rate to 5.25%. Following the MPC meeting, Sanjay Malhotra announced a 25 basis point cut in the repo rate, viewed as a booster for the real estate sector. Finance and real estate company stocks are surging with the announcement. Industry leaders are praising this move.
Praveen Jain, president of NAREDCO, acknowledges the 25 basis points cut as a vital step towards invigorating the economy and the real estate sector. He appreciates RBI's commendable efforts to control inflation and stabilize prices in recent months. This cut will improve liquidity and promote new investments across various sectors. Home loans, in particular, will become more affordable, encouraging buyers and stimulating demand for housing. The positive impact will extend to related industries, creating more job opportunities. Interest from developers and buyers in tier-2 and tier-3 cities may increase.
Atul Monga, CEO, and co-founder of Basic Home Loan considers the 25 basis point repo rate reduction as a significant stride toward accelerating growth. For home loan seekers, this is a welcome move. As most floating-rate home loans are directly linked to the repo rate, borrowers can expect relief in their loan EMIs as banks and lending institutions pass the benefits to customers.
For potential homebuyers, lower interest rates signal increased buying activity, particularly beneficial for the middle-income group. This step is anticipated to improve housing demand and consumer confidence.
Lower interest rates will directly benefit homebuyers, making EMIs less burdensome. Shikhar Agarwal, Chairman of BLS E-Services Limited, suggests that this decision will benefit leading PSU and private sector banks as the largest business correspondents/business facilitators.
Piyush Lohia, Director of Lohia Worldspace, believes that the RBI's decision to bring down the repo rate to 5.25% strengthens market stability, signifying a balanced approach between growth and inflation. It offers clarity favorable for developers and homebuyers, creating a predictable environment for decision-making. The upward revision of GDP growth to 7.3% is especially positive for tier-2 markets where growing aspirations meet the need for affordable, quality housing.
Meanwhile, Emami Realty's MD and CEO, Dr. Nitesh Kumar views the 25 bps cut as a game-changer for countless Indian homebuyers. Since February 2025, with a total cut of 150 bps, this isn't just monetary easing; it marks the decisive return of housing affordability after three years of high EMIs. Loan eligibility on the same income has risen by 8-10%. The real estate sector is witnessing a turning point. Post the October cut, walk-ins and serious inquiries have surged by 25-30%. Bookings in affordable and mid-segment housing, the backbone of Indian housing, have already accelerated. This decision will transform this momentum into full revival.
He states that the ongoing Festive-to-New Year period presents the best opportunity in three years, possibly the best this decade for homebuyers. Home loan rates are at their lowest since mid-2022, inventories are fresh, and developers are keeping base prices stable to offer buyers maximum benefits.
Saransh Trehan, Managing Director at Trehan Group, welcomes the repo rate cut as a beneficial step for real estate, suggesting it will lower home loan interest rates, making home-buying more affordable and accessible. It is hoped that this decision will boost buyer confidence and rapidly improve demand. Developers also find relief in this cut as it eases project financing and working capital pressure, helping advance construction and ensuring timely project delivery. This decision signals positively for both the economy and real estate.
Vikas Garg, Joint Managing Director of Ganga Realty, now states that lower interest rates mean cheaper home loans, boosting buyer confidence and strengthening demand in mid-income and premium housing. Lower EMIs will prompt quick decisions from buyers waiting for a better environment. Developers also benefit from this rate cut as it eases financing and working capital pressure, allowing seamless progress in construction and steady cash flow, aiding timely delivery and new project launches, especially in fast-growing markets like Gurugram and NCR. This policy change bolsters sector-wide confidence and strengthens momentum.
