In a widely anticipated move, the Reserve Bank of India (RBI) has announced a 25 basis point cut in the benchmark repo rate, reducing it from 6.25% to 6.00%. This decision, made unanimously by the six-member Monetary Policy Committee (MPC), marks the first rate cut since May 2020, signalling a policy shift aimed at safeguarding the domestic economy against mounting global and domestic uncertainties.
The rate cut is expected to translate into lower borrowing costs for individuals and businesses, with home loan EMIs likely to decrease in the coming months, providing relief to homebuyers and reviving demand in the housing sector.
Backdrop: External Pressures and Domestic Slowdown Prompt Action
The MPC’s decision comes at a time when India is facing renewed external challenges. The recent imposition of a 26% tariff on Indian imports by the United States is projected to lower India’s GDP growth in FY 2025–26 by 20–40 basis points, potentially bringing it down from the RBI’s earlier forecast of 6.7% to around 6.1%.
This geopolitical development, coupled with signs of a slowdown in private consumption and industrial output, has led the central bank to adopt a more accommodative stance. According to experts, the rate cut is not just a response to external shocks, but also a proactive step to stimulate credit growth, investment, and consumption domestically.
Growth Forecast: RBI Projects FY26 GDP at 6.5%
Despite global turbulence, RBI Governor Sanjay Malhotra reiterated a 6.5% GDP growth projection for FY 2025–26, buoyed by resilient domestic fundamentals. The quarterly breakdown of the growth projection is as follows:
- Q1: 6.5%
- Q2: 6.7%
- Q3: 6.6%
- Q4: 6.3%
This projection follows robust 9.2% GDP growth in the previous year, driven by post-pandemic recovery momentum. Malhotra emphasized that the agriculture sector continues to perform well, supported by healthy reservoir levels and strong rabi crop output, providing a buffer to overall economic activity.
Inflation Outlook: CPI Forecast Trimmed to 4%
In a positive development for the monetary policy framework, the central bank has revised its consumer price index (CPI) inflation forecast downward to 4.0%, from the earlier estimate of 4.2%. The detailed quarterly projections are:
- Q1: 3.6%
- Q2: 3.9%
- Q3: 3.8%
- Q4: 4.4%
Governor Malhotra noted that inflationary risks remain evenly balanced, with softening crude prices, stable food inflation, and prudent supply-side management aiding price stability. This inflation trajectory offers further flexibility for the RBI to maintain its accommodative policy stance without stoking inflationary pressures.
The repo rate cut is expected to bring down lending rates across the banking system, making loans cheaper for consumers and businesses alike. This is particularly good news for homebuyers, as home loan interest rates are closely linked to the repo rate. The real estate sector, which has been experiencing uneven recovery in recent quarters, is likely to witness improved sentiment and higher sales volumes, especially in the affordable and mid-income housing segments.
Industry Experts Opinions
Ms. Manju Yagnik, Vice Chairperson of Nahar Group and Senior VP, NAREDCO, Maharashtra
“The Reserve Bank of India’s anticipated decision to cut key interest rates by 25 bps to 6% is a welcome move for the housing sector’s upcoming fiscal year, FY26. Lower interest rates will make home loans more affordable, enhancing the purchasing power of potential homebuyers and stimulating demand across various segments of the real estate market. This reduction is particularly timely, as it aligns with the current momentum in the housing market, encouraging both first-time buyers and investors to consider property acquisitions. Furthermore, decreased borrowing costs are likely to invigorate the affordable housing segment, making homeownership more accessible to a broader demographic. Overall, this rate cut is poised to bolster consumer confidence and contribute positively to the growth trajectory of the real estate industry.”
Mr. Dharmendra Raichura- VP & Head of Finance at Ashar Group
“The RBI’s anticipated 25-basis-point cut in the repo rate, bringing it down to 6.00%, signals a strategic move towards balancing economic growth with inflation stability. For the real estate sector, this move is expected to give a strong boost by reducing borrowing costs for both homebuyers and developers. Improved credit access will enhance affordability and encourage those who were waiting for the right time, especially in the mid-income and premium segments to move forward with their home-buying decisions. From a developer’s perspective, the rate cut opens the door to more cost-effective financing. This allows for greater focus on faster project execution, superior construction quality, and the launch of more customer-centric offerings. It also boosts buyer confidence, increasing enquiries, site visits, and conversion rates. Combined with stabilising inflation and a steady pace of urbanisation, this supportive policy move sustains market momentum and strengthens the foundation for long-term sectoral growth.”
Mr. Sunny Bijlani, Joint Managing Director – Supreme Universal
“The RBI’s decision to cut the repo rate by 25 basis points to 6% in April 2025 is a significant relief for homebuyers navigating rising property prices and inflation. For customers, this translates to lower home loan interest rates, making EMIs more manageable and premium homeownership more attainable. It’s a powerful enabler for buyers looking to upgrade to spacious, well-designed residences that align with their aspirations. With better financing flexibility, developers can focus on timely delivery, superior amenities, and curated living experiences. This rate cut not only encourages confident buying decisions but also reinforces the industry’s role in delivering future-ready homes that cater to evolving urban lifestyles.”
Mr. Shrinivas Rao, FRICS, CEO, Vestian
“The repo rate cut of 25 basis points is in line with current market conditions as the headline inflation in February was within the RBI’s tolerance limit due to a sharp decline in food prices. On the other hand, the fear of recession is also looming globally amid trade friction between the USA and its trade partners. This reduction in the repo rate is expected to catalyse domestic consumption, boosting GDP growth. Moreover, the change in stance from ‘Neutral to Accommodative’ points towards easy monetary policy and future rate cuts, leading to a reduction in mortgage rates and a boost to the real estate demand.”
Mr. Vimal Nadar, Head of Research at Colliers India
“In the first MPC meeting of the fiscal 2025-26, RBI has further reduced the repo rate by 25 bps to 6.0%. The change in stance from ‘neutral’ to ‘accommodative’ is indicative of a growth supportive monetary policy and this becomes more critical in the backdrop of heightened uncertainty in global markets following the levy of reciprocal tariffs by the US. Although the intensity and impact of ongoing tariff escalations needs to be fully ascertained, RBI remains optimistic on domestic growth outlook and projects the GDP to grow by 6.5% in the fiscal 2025-26. Recent easing of inflation is likely to increase disposable income which in turn has the potential to boost domestic consumption.
Consecutive reduction in benchmark lending rates will boost homebuyers’ sentiments and resultantly improve housing demand particularly in affordable and middle-income segments. Real estate developers across segments also stand to benefit from likely lowering of financing costs. Overall demand and real estate growth is likely to be on the upswing, given the anticipation of further easing in monetary policy. However, global headwinds and trade frictions will remain a key monitorable for all economic sectors including real estate.
RBI has also proposed securitization of stressed assets through a market-based mechanism, in addition to the Asset Restructuring Company (ARC) route. Reduction in borrowing costs coupled with alternate resolution mechanism for stressed assets is likely to benefit real estate stakeholders in the near-mid-term. This is expected to provide significant relief to cash strapped developers and several stalled projects due to financial constraints.”
Mr. Amit Goyal, MD, India Sotheby’s International Realty
“The RBI’s 0.25% repo rate cut is a stabilising and much-needed move at a time when global economic turmoil poses challenges. By ensuring liquidity and keeping borrowing costs attractive, this decision by the central bank, will bolster corporate confidence and investments. For India’s housing sector, if the rate cut is passed on as a benefit on home loans, it will support the demand momentum, and help the real estate industry ride over this period of uncertainty.”
Mr. Piyush Bothra, Co-Founder and CFO, Square Yards
“The RBI’s second consecutive repo rate cut, bringing it down by 25 basis points to 6%, is a timely and encouraging move for the real estate sector. For end-users, the lower rate translates to more affordable EMIs, making home ownership more achievable at a time when property values are inching upward. Moreover, this further strengthens liquidity in the system, enabling developers to secure funding and accelerate new project rollouts. As inflation remains under control, this rate cut could serve as a stabilizing force amid broader global uncertainties, reinforcing stakeholder confidence in residential real estate.”
Mr. Amit Prakash Singh, Co-Founder & Chief Business Officer, Urban Money
“The RBI’s decision to cut the repo rate by 25 basis points to 6% is a strong, forward-looking signal for the broader credit ecosystem. For borrowers across segments—be it home loans, personal loans, business loans, or loans against property—this translates into more affordable access to capital and lower EMIs. From a lender’s standpoint, enhanced liquidity and lower cost of funds create an environment where institutions can expand credit offerings more aggressively, target new customer segments, and fine-tune risk-based pricing models. At a time of rising global uncertainties, this move will boost credit demand, improve affordability, and enhance liquidity across the lending ecosystem.”
Mr. Deep Vadodaria, CEO, Nila Spaces
“The 25 basis points rate cut is a positive development for the real estate industry. The lower interest rates will alleviate the borrowing burden on both homebuyers and developers, which will most likely increase demand for housing and improve market sentiment. Along with the robust outlook on India’s GDP growth, this monetary softening is expected to further accelerate the consumption and investment cycles. We continue to believe that such policy measures will be sufficient to sustain the sector’s growth trajectory in the coming quarters.
Within the context of persistent global uncertainties and geopolitical conflicts, this incremental action does elevate economic morale. It demonstrates the central bank’s pledge to moderation balancing nurturing domestic growth with keeping a close watch on inflation. In addition, the interest rate reductions will likely improve funding availability for commercial real estate, facilitating expansion and new development across major markets.”
Mr. Sunil Sisodiya, Chairman and CEO, Neworld Developers
“The 25 basis point cut in the repo rate to 6% is a positive and timely move that will directly benefit the residential real estate segment. Lower home loan interest rates are a significant enabler for homebuyers, especially first-time buyers, and will help in converting pent-up demand into actual sales. At a time when affordability and sentiment play a key role in decision-making, this rate cut will act as a strong catalyst for housing demand across segments.
With India’s economic outlook remaining resilient, we believe this supportive monetary stance will provide further momentum to the housing market and encourage sustained growth in residential real estate in the coming quarters.”
Mr. Vishal Raheja, Founder & Managing Director, InvestoXpert.com
“For the real estate sector, the rate cut of 25 basis points is a welcome development. Lower interest rates will reduce the cost of borrowing for homebuyers and developers, which is likely to stimulate housing demand and improve overall market confidence. With India’s GDP growth projected to remain strong, this monetary easing is expected to further strengthen consumption and investment cycles. We remain optimistic that such policy support will sustain the sector’s growth trajectory in the coming quarters.
It offers a much-needed boost to economic sentiment amid ongoing global uncertainties and geopolitical tensions. This calibrated move reflects the central bank’s commitment to supporting domestic growth while maintaining a close watch on inflation dynamics. Additionally, lower interest rates are expected to improve funding conditions for commercial real estate, supporting expansion plans and new developments in key markets.”
Mr. Pradeep Aggarwal, Founder & Chairman, Signature Global (India) Ltd.
“The Reserve Bank of India’s decision to reduce the policy rate by 25 basis points to 6 percent comes at a crucial juncture when inflation is beginning to show signs of stability and the broader economic environment appears favorable for nurturing growth through lower interest rates. This proactive move is expected to significantly boost homebuyer sentiment, as reduced interest rates translate into improved affordability, thereby encouraging a larger number of people to consider investing in real estate. On the developer front, the lower cost of borrowing will offer a much-needed cushion, enabling them to fast-track project launches, expand their portfolios, and cater to the anticipated rise in housing demand. Overall, this policy rate cut is a timely and positive step that holds promise for stimulating activity across the entire real estate value chain, benefiting both end-users and industry stakeholders alike.”
Mr. Aman Sarin, Director & Chief Executive Officer, Anant Raj Limited
“The RBI’s second consecutive rate cut is a welcome move and is expected to provide a strong boost to real estate demand, especially by making home loans more affordable for buyers.
In its latest review, the Monetary Policy Committee not only reduced the repo rate by 25 basis points but also shifted its stance from ‘neutral’ to ‘accommodative’ — a clear signal that, going forward, the MPC is now considering only two possibilities: status quo or further rate cuts.
This change in stance is extremely encouraging, especially for the housing sector. We anticipate more rate cuts in the coming quarters, and the biggest beneficiaries will be home loan borrowers—particularly those taking large-ticket loans for mid and premium homes. Lower interest rates enhance both affordability and loan eligibility, helping many fence-sitting buyers finally make their purchase decisions.
We also expect renewed interest in the high-end and luxury segments as improved purchasing power, combined with softening rates, makes aspirational living more attainable for a wider audience.”
Mr. Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation
“The two consecutive policy rate reductions by the RBI, of 25 basis points each, are expected to significantly benefit home buyers. Many prospective buyers who had been cautiously observing the market are now likely to take a decisive step towards purchasing their dream homes. Simultaneously, the reduction in rates will lower borrowing costs for developers, encouraging them to launch more projects in the coming quarters to meet anticipated demand. This dual impact is expected to stimulate both housing demand and supply, providing a positive momentum to the real estate sector.”
Mr. Udit Jain, Director, ONE Group Developers
“The RBI’s decision to cut the repo rate is along expected lines. In its previous MPC review, the Governor had already hinted at the possibility of further rate cuts, and we now have a cumulative 50 basis points cut so far. The encouraging development is the RBI’s decision to shift its policy stance from ‘neutral’ to ‘accommodative’. This signals that, barring any major shocks, the MPC is likely to consider only two options going forward—status quo or further rate cuts.
This move bodes well for the broader real estate sector, especially when supported by improved liquidity and relatively stable property prices. If inflation continues on its current downward trajectory and macroeconomic indicators remain supportive, we may witness further monetary easing in the upcoming policy cycles—potentially driving even more momentum in housing demand.
Lower interest rates on home loans will benefit buyers across segments, from affordable housing to premium and luxury categories, making homeownership more accessible and attractive.”
Mr. Raoul Kapoor, Co-CEO, Andromeda Sales and Distribution Pvt Ltd
“The Reserve Bank of India’s decision to cut the repo rate by 25 basis points for the second consecutive time—bringing the total cut to 50 basis points—comes as a welcome move for borrowers and the real estate sector alike. This back-to-back reduction is not only a sign of improving macroeconomic stability but also a strategic push to boost consumption and home ownership.
Lowering the repo rate effectively brings down cost of capital for banks and housing finance companies, translating into cheaper home loans for borrowers. This makes home ownership more affordable, especially for first-time buyers and middle-class households.”
Mr. Mohit Goel, Managing Director, Omaxe Ltd.
“The RBI’s decision to reduce the repo rate by 25 basis points to 6% is a welcome move that aligns well with the current macroeconomic situation. With inflation showing signs of easing and growth requiring a gentle push, this cut will act as a catalyst for demand revival—especially in interest rate-sensitive sectors like real estate. Lower borrowing costs will not only improve homebuyer sentiment but also ease the financial burden on developers. This policy shift reaffirms RBI’s commitment to a growth-supportive environment while maintaining inflation within its target range.”
Mr. Aditya Kushwaha, CEO and Director, Axis Ecorp
“The RBI’s decision to cut rates comes at a significant juncture when NRI interest in Indian real estate is gaining momentum. With the rupee experiencing volatility, luxury real estate and holiday homes present a compelling hedge—offering both capital appreciation and stable returns. This move is expected to boost sentiment across the premium housing segment, particularly in emerging lifestyle destinations. Lower borrowing costs will encourage investment in second homes and holiday properties, which are increasingly being seen as both lifestyle upgrades and long-term assets. Overall, the rate cut aligns well with the evolving preferences of global Indian investors, including HNIs, millennials, and new-age investors seeking stable, high-quality real estate opportunities.”
Ms. Amrita Gupta, Director, Manglam Group
“The RBI’s move to reduce the repo rate to 6% with an accommodative stance is a positive signal for the real estate sector. Lower borrowing costs are likely to spur housing demand, especially in the mid and affordable segments. At Manglam Group, we see this as a strong boost for Tier 2 and 3 cities, where infrastructure growth and rising aspirations are already driving real estate momentum. While global uncertainties like the U.S. tariffs pose challenges, domestic fundamentals remain strong, and we are well-positioned to leverage this opportunity across emerging markets.”
