The Reserve Bank of India's (RBI) decision to cut the repo rate by 50 basis points will lower EMIs, giving a boost to home buying and stimulate housing demand, real estate developers and experts said on June 6 after the central bank went for a larger-than-expected rate cut. The lowered rates will translate into decreased borrowing costs for both homebuyers and developers, which will further incentivise property investments, they said.
The Reserve Bank of India's Monetary Policy Committee decided to reduce the repo rate by 50 basis points (bps) from 6 percent to 5.5 percent, the third straight time that the key rate has been cut.
Pradeep Aggarwal, Founder and Chairman, Signature Global (India) Limited, said that the twin reduction of the repo rate by 50 basis points to 5.50 percent and cash reserve ratio by 100 basis points to 3 percent respectively by the RBI provides significant relief for homebuyers across the country.
Market observers believe that a repo rate cut isn't just about making more money available; it's also a powerful way to encourage spending and boost purchasing power, ultimately fuelling economic growth. For the real estate sector, lower borrowing costs are a big win, as reduced home loan interest rates act as a major draw for potential homebuyers.
“This bold move by the apex bank comes at a crucial time when inflation is easing, and the economy requires strong stimulus to sustain growth. Lower borrowing costs will make home loans more affordable, thereby encouraging more buyers to enter the market. The reduction in CRR is expected to infuse significant liquidity in the banking system, which will prompt banks to lend even more,” he said.
Aggarwal added that the demand for mid and premium segment homes has already been on the rise following previous rate cuts, and this larger reduction will further accelerate interest from both homebuyers and investors.
Anshul Jain, Chief Executive, India, SEA and APAC Tenant Representation, Cushman & Wakefield, said that India’s macroeconomic fundamentals continue to provide stability and confidence amidst global volatility. RBI has delivered a boost to consumer sentiment with a 50 bps cut, seen positive for the real estate sector, particularly housing.
“With this, the cumulative cut for this year of 1 percent is indeed going to help translate into lower EMIs and relatively better affordability, thereby helping mid-segment housing across top tier cities. With inflation expected to remain below the 4 percent threshold, the timing of this policy move is both prudent and well-calibrated,” he said.
Jain further said that the decision comes at an opportune time as India is well-positioned to attract long-term investments across asset classes. Lower borrowing costs will significantly improve the viability of capital-intensive developments, particularly in high-growth sectors such as Global Capability Centers (GCCs), Data Centres, and the Industrial & Logistics segment.
This continued monetary easing underscores India’s commitment to sustaining economic momentum while reinforcing its appeal as a stable, growth-oriented market. For domestic and global investors alike, the move further cements India’s position as a compelling destination for capital deployment, innovation, and large-scale infrastructure creation”
The RBI, in May 2022 had started hiking repo rates in view of the Russia-Ukraine war and it continued till May 2023 and the repo rates remained unchanged at 6.50 percent till February 2025. In February 2025 repo rates were reduced by 25 bps.
Dhruv Agarwala, Group CEO, Housing.com and PropTiger.com said that the RBI’s 50 basis point rate cut reflected a timely and well-calibrated response to the prevailing macroeconomic environment—marked by contained inflation and stable liquidity.
"It reinforces the central bank’s commitment to supporting growth amid ongoing global headwinds. While a 25-basis-point cut was anticipated, the larger reduction offers significant relief. The move is expected to lower borrowing costs, bolster business confidence, and provide much-needed relief to sectors under pressure," he said.
Aman Sharma, Managing Director and Founder of Aarize Group said that the RBI’s move is expected to accelerate project timelines and make property ownership more attainable for a broader spectrum of buyers.
Ankur Jalan, CEO, Golden Growth Fund (GGF), a category II Real Estate focused Alternative Investment Fund, said that the three consecutive reductions in repo rate and 100 bps cut in CRR are a welcome move to spur consumption demand and economic growth in view of global uncertainties, growth acceleration and decline in inflation.
Shishir Baijal, Chairman and Managing Director, Knight Frank India, said that over the last few years, the strong housing market momentum was increasingly concentrating in the premium end even as there were signals of weakening the lower segments.
"With this cumulative 100 basis point cut in the policy interest rate we expect rekindling of the lower segments as affordability will witness a meaningful improvement for such homebuyers. Liquidity conditions remain balanced and conducive to supporting this monetary stance and we hope to see a greater transmission of this rate cycle," he said.
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