RBI Cuts Repo Rate by 0.25% to 6%, Expected to Boost Housing Sector
Repo Rate Cut Impact on Real Estate: The Reserve Bank of India (RBI) has cut the repo rate by 0.25%, bringing it down to 6%, for the second consecutive time. This decision comes at a time when the housing sector witnessed a slowdown in the first quarter of 2025. It is now hoped that cheaper borrowing costs could revive demand in the real estate sector.
Cheaper Loans Offer Hope for Buyers
This repo rate cut by the RBI will make borrowing cheaper for banks, potentially leading to lower EMIs on home loans. This could benefit both new and existing borrowers. Real estate companies and industry experts believe this move will bolster buyer sentiment and encourage demand in the housing market.
RBI's Accommodative Stance Aims to Boost Economy
The RBI has shifted its monetary policy stance from 'neutral' to 'accommodative,' increasing liquidity and making borrowing easier. This policy change could prove beneficial for investment-driven sectors like real estate.
Expert Opinion: Direct Benefits for Homebuyers
According to Vimal Nadar, Research Head at Colliers India, the reduction in interest rates will directly impact affordable and middle-income housing. Piyush Bothra, CFO of Square Yards, believes the RBI's decision is timely and positive, injecting new life into the housing sector.
Banks Expected to Pass on the Benefits to Customers
However, experts also believe that the RBI's repo rate cut will only be meaningful if banks quickly pass on the benefits to home loan customers. Anuj Puri, Chairman of Anarock Group, pointed out that the benefits of previous cuts did not reach customers, highlighting the increased responsibility on banks.
Balancing Affordable Lending Amidst Rising Prices
According to an Anarock report, property prices in India's top seven cities increased by 10% to 34% in the first quarter of 2025. Therefore, the repo rate cut can play a crucial role in maintaining the affordability of housing.
