The RBI’s 25-basis-point reduction in the repo rate to 5.25% is expected to make loans—especially home loans—more affordable, offering timely relief to buyers facing elevated property prices. Experts believe this could revive interest among first-time, affordable, and mid-income buyers, though the real impact will depend on how quickly banks pass on the lower rates. If transmission is swift, housing sales could strengthen through the rest of FY25 and into early 2026.
Industry leaders have welcomed the move, calling it a sign of confidence in stable inflation and a push to support economic growth. They say cheaper borrowing will boost affordability, sentiment, and demand in the residential market, particularly in segments that have seen weakening sales due to price hikes. With home prices rising sharply across major cities, the rate cut offers an important cushion for prospective buyers who had delayed decisions.
Economists note that the reduction could convert fence-sitters into active buyers and support both metro and Tier-2/3 housing markets. Developers are also likely to benefit from a lower cost of capital, helping accelerate construction and new launches. In commercial real estate, improved financing conditions may further support project pipelines and meet expanding demand from global firms.
