The Reserve Bank of India (RBI) cut the repo rate by 50 basis points on 6 June 2025, decreasing the rate from 6.00% to 5.50%. This is a decrease in repo rate for the third consecutive time, which is considered a positive sign for the real estate sector. Especially after a slight decline in sales in Q1 2025, this deduction is being seen as an initiative taken on time.
Home loans will be cheap, buyers will get benefit
RBI’s repo rate cuts are expected to reduce home loan interest rates, which will reduce EMI and buy houses will be easier than before. Its special benefit will be given to the buyers looking for house buyers and affordable houses for the first time. However, it completely depends on how quickly and how much the banks give the benefit of this deduction to the customers.
RBI: Developers will get the benefit of cheap credit
Repo rate cuts (RBI) will reduce the cost of taking loans of developers. This will not only improve their financial condition, but will also help in completing stuck projects. In addition, it will be possible to bring unusual inventory to the market and timely project delivery.
Expectation of improvement in affordable housing
According to anarock data, in 2019 where affordable housing sales stake was 38%, it fell to 18% in 2024. At the same time, the supply of this segment also decreased from 40% to 16%. However, a 19% decline in Anbike stock is an indication that end-user demand remains. RBI’s new repo rate cuts may increase demand in the affordable and mid-incoured segment.
RBI: Improvement in cash will accelerate in projects
The reduction made by RBI to the Cash Reserve Ratio (CRR) will improve the liquidity of banks. With this, banks will be in a position to give more loans, so that developers will get capital easily and timely delivery of projects can be ensured.
Sales may increase in the market, investors’ confidence will also increase
Experts believe that the move may accelerate the inquiry and sales of Residential Property (RBI), especially in metros. Also, low capital costs will increase the trust of investors, which can intensify investment activities in both residential and commercial segments.
RBI: Global stress is possible to affect, domestic construction will boost
However, Anarock Chairman Anuj Puri says that the increasing cost of global trade stress and construction materials can partially affect this positive impact. Profits for developers may be reduced, especially in luxury and commercial projects. In such a situation, permanent development will be possible only with the steps taken by the government (RBI) to get policy support and material from domestic sources.
