“Reserve Bank of India (RBI) is expected to lower the repo rate by 25 basis points for the third consecutive time to boost consumption as inflation continues to remain below the 4% target range. It is also anticipated to maintain an ‘accommodative’ monetary policy stance to support growth amid global uncertainties triggered by US tariffs and geopolitical frictions.”
Rao further added, “This rate cut is expected to bring relief to both homebuyers and developers, as most commercial banks are likely to follow suit and reduce interest rates. While homebuyers will be able to secure home loans at lower rates, developers will benefit from low borrowing costs, potentially boosting affordability and investments in the real estate sector.
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2. Mr Vimal Nadar, National Director and Head of Research, Colliers India
“We expect the RBI to continue its growth-supportive stance and further rationalize the repo rate. While inflation being in control provides the elbowroom for continuation of an accommodative policy; impact of external trade volatilities and atypical monsoon patterns are likely to have a bearing on future growth prospects. A third consecutive reduction in benchmark lending rates can spur homebuyers’ sentiment and resultantly improve housing demand particularly in affordable and middle-income segments. For developers too, the rate cut could aid in gradual inventory clearance and offer financial relief by lowering of borrowing costs.”
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Mr Piyush Bothra, Co-Founder and CFO, Square Yards
“Despite India’s economy growing by a robust 7.4% in the January–March 2025 quarter — exceeding expectations — the full-year growth for FY 2025 is has slowed to 6.5%, marking the weakest pace since the pandemic. With inflation well within control, now hovering near 3%, this is an opportune moment for the central bank to take some bold steps. A significant rate cut is not just desirable but necessary to revive the animal spirits and boost private investments, which have been quite sluggish. The real estate sector mirrors the broader economic trend, with growth moderating after a strong post-pandemic rebound. A meaningful reduction in the repo rate could be the catalyst the property market needs. To put it in perspective, even a 1% reduction in interest rates can increase a homebuyer’s purchasing power by nearly 10%, turning the dream of owning a house into reality for a larger population.”
