The Reserve Bank of India’s Monetary Policy Committee has reduced the repo rate by 25 basis points to 5.25%, while maintaining a neutral policy stance. The decision reflects the RBI’s cautious approach as inflation stays soft and economic growth remains strong without signs of overheating. This move comes after the October review, where the repo rate was held at 5.50%.
Alongside the rate cut, the RBI announced liquidity support measures, including open market operations worth ₹1 lakh crore in December and a three-year USD/INR swap of $5 billion. These steps aim to ease money market conditions and ensure adequate liquidity in the financial system. Government bond yields responded immediately, with the benchmark 10-year yield slipping from 6.51% to 6.47%, indicating lower borrowing costs.
The RBI highlighted that core inflation has softened in recent months and projected full-year CPI inflation at 2%, which is lower than its earlier estimate. Easing commodity and precious metal prices have contributed to this favourable inflation outlook. On the growth front, India’s July–September GDP expansion of 8.2% exceeded expectations, prompting several analysts to revise their full-year forecasts to above 7%. With growth near India’s potential range of 6.5–7%, the central bank now has more room to adjust rates without risking inflationary pressure.
Overall, the rate cut is expected to make loans slightly cheaper for households and businesses, although the RBI signalled a data-dependent approach going forward.
Industry Expert Opinions
Ms. Manju Yagnik, Vice Chairperson of Nahar Group and Senior Vice President of NAREDCO-Maharashtra
“A 25 basis point rate cut at this stage will meaningfully support homebuyer sentiment and improve affordability across categories. Over the past few quarters, demand has remained resilient despite elevated prices, and a reduction in borrowing costs will give fence sitters the confidence to move ahead with their purchase decisions. The real estate sector has been navigating higher input costs and currency-linked inflation in materials, so a softer rate environment will ease financial pressure for both buyers and developers. With inflation stabilising and growth remaining strong, this rate cut sends a constructive signal that supports long term housing demand and keeps the momentum intact across mid, premium and luxury segments.”
Mr. Dharmendra Raichura, VP and Head of Finance – Ashar Group
“The rate cut to 5.25% gives an immediate boost to affordability for home‑buyers, leading to stronger demand and improved confidence in the real‑estate sector. At the same time, the depreciation of the rupee makes imported building materials costlier — a challenge for developers’ margins. However, for NRIs and foreign‑remittance‑based buyers, the weaker rupee makes Indian real estate more attractive and affordable, balancing demand dynamics. In this context, developers who manage cost inflation smartly — while catering to a growing base of buyers with foreign‑currency incomes — stand to benefit from improved sales velocity and broader market participation.”
Mr. Ankur Jalan, CEO, Golden Growth Fund (GGF), a category II Real Estate focused Alternative Investment Fund (AIF)
“From depositors’ standpoint, a 25bps cut in repo rate will create concerns about declining returns on fixed deposits and other interest-bearing savings. Furthermore, this would likely push banks to trim deposit rates in the coming months, making it harder for savers to earn meaningful returns. While lower rates may support broader economic growth, affluent investors and family offices often redirect capital toward higher-return products such as real estate–focused Category II AIFs to preserve real yields, thereby improving fundraising momentum for these funds. A lower interest-rate environment also reduces the cost of capital for developers and strengthens project viability, which in turn expands the opportunity for AIFs.”
Mr. Lalit Parihar, Managing Director, Aaiji Group
“The RBI’s decision to cut the repo rate by 25 bps is a significant boost for the ongoing real estate upswing. By lowering the cost of borrowing, the move directly translates into more affordable home loans for both prospective buyers and existing customers in form of reduced EMIs. This improved affordability is expected to strengthen homebuyer sentiment across segments—from first-time homeowners to those considering upgrades or long-term investments. With the demand for quality homes continuing to surge, driven by urban expansion, rising disposable incomes, and a preference for modern, well-planned living spaces, the rate cut provides just the right momentum for sustained growth. Developers stand to benefit as well, as easier credit conditions can improve liquidity, accelerate project execution, and support new launches in high-demand micro-markets.”
Mr. Vijay Harsh Jha, Founder and CEO, VS Realtors
“The housing market has shown signs of a slowdown. A 25-bps rate cut and its proper transmission would provide homebuyers cushion from rising property prices thereby encouraging home purchases. Developers, too, stand to benefit from lower cost of borrowing enabling faster project execution. The housing demand-supply dynamics seem to be aligning since second half of 2024 and this pursuit of symmetry, in what developers are launching and what buyers want, will help propel real estate market.”
Mr. Aniruddha Mehta, Chairman & Managing Director, Umiya Buildcon Ltd
“The Reserve Bank of India’s decision to reduce the repo rate by 25 basis points to 5.25% increases the affordability of homes for a variety of buyers. Furthermore, with this decrease, lenders will pass on the benefit of lower interest rates, giving buyers greater access to purchase power and promoting quick decision making between both the mid-income and luxury home segments. In addition, this cut gives developers improved access to capital and reduced financing costs, allowing them to more easily plan their cash flows, and provides them with the capital needed to launch new projects. We anticipate as demand continues to improve, the speed of real estate sales will continue to increase, confidence in the market will grow, and the overall growth outlook of the real estate sector will be improved as we move towards 2026.”
Mr. Ashok Kapur, Chairman, Krishna Group and Krisumi Corporation
“The 25 bps repo rate reduction is well aligned with the current low-inflation environment and India’s steady growth outlook. The luxury housing segment has seen decisive momentum from end-users over recent quarters, driven by rising incomes and a shift towards lifestyle-led living. Softer lending rates will further enhance affordability for discerning buyers looking to upgrade and invest in high-quality homes that offer better design standards and long-term asset value. We expect sustained demand within the premium segment as consumer preference evolves toward integrated, high-quality, future-ready developments. The rate cut strengthens sentiment and supports the long-term growth cycle of the real estate market.”
Mr. Shiv Garg, Director, Forteasia Realty Pvt. Ltd.
“The Reserve Bank of India (RBI) has decreased the policy rate to 5.25% and made a bold statement by adopting the theme of growth support. The developers will be able to get working capital more easily, which will, in turn, make it possible for them to get their projects financed and thus, speed up the construction of townships, plotted, and large integrated projects that are heavy on capital expenditure. Lowering the monthly home loan EMI by Rs 1,850 for a 20-year Rs 35 lakh loan will make housing more affordable. It will happen at the time when banks and NBFCs are lowering their loan rates, and the developers with strong balance sheets can refinance at lower costs and pass on the benefits to the buyers in terms of limited-time offers and schemes. This policy measure, along with an upgraded FY26 GDP forecast, will usher in a new cycle of launches, the consolidation of weaker players, and increased institutional investment in residential, commercial, and warehousing assets.”
Mr. Anurag Goel, Director, Goel Ganga Developments
“The recent reduction of the repo rate by 25 basis points to 5.25% is expected to have a significant impact on home loan rates in the coming months, assuming banks and HFCs quickly pass the benefit on to the borrowers. Upward revision of GDP growth forecasts for FY26 leads to a better income view and increased job confidence, which is exactly what makes those who are undecided finally turn their inquiries into bookings. The combination of lower EMIs and a more optimistic growth outlook creates a perfect timing for the end-users in the affordable and mid-income segments, particularly in Tier II and III cities where EMI sensitivity is high. This act can spark a revival in the areas where the price hike was already felt, and at the same time, it would contribute to pro-cyclical and healthy upcycling rather than speculative froth.”
Mr. Pramod Kumar Gupta, Director, Kadamashree Developers India LLP
“The repo rate of 5.25% which came after the series of cuts in 2025, significantly boosted the relative appeal of real estate as an investment class compared to fixed-income products. Investors are likely to see Grade A residential, commercial strata units and listed REITs as the new places for superior risk-adjusted returns and regular cash flows as safer instruments yields go lower. The increased FY26 GDP growth expectancy points to a long-lasting demand situation for the likes of office, retail and logistics that will in turn support rental growth and reduced vacancy rates midterm. The policy change is like rolling out the carpet for homebuyers and investors who think long-term as it indicates the start of a friendly interest rate cycle where getting in on quality assets during the rise could provide both capital appreciation and income stability for the next 3–5 years.”
Mr. Shashank Gupta, Director, RPS Group
“The Reserve Bank of India (RBI) has cut the repo rate again, which means that in the long term, fixed deposit (FD) investors will have to accept that their once attractive returns are going to be lower. Instead of panic, this is the right time to think in a strategic way. One of the best means is FD laddering: dividing the investments into different tenures so that not all the deposits will be locked at the current lower rates, and there will always be some maturities ready to take the rates if the cycle changes. Senior citizens can choose a combination of bank FDs, high-rated corporate FDs, and small savings schemes for safety with slightly higher yields instead of depending on just one product. On the other hand, Rs 1,850 will be the drop in monthly home loan EMI for a Rs 35 lakh loan over 20 years, which is a support for the borrowers.”
Mr. Siddharth Maurya, Founder & Managing Director, Vibhavangal Anukulakara Pvt. Ltd.
“The cut in the repo rate by the RBI once more signifies the end of very appealing fixed deposit returns for FD investors, at least for a while. Don’t panic; instead, this is the right moment to act wisely. For example, you can consider FD laddering as a practical measure: divide your money among various periods so that not all the deposits grow at today’s lower rates, and at the same time, there are some maturities which are always coming up to get the better rates if the cycle turns. This way, senior citizens can also opt for a combination of bank FDs, a few corporate FDs, and small savings schemes to get a blend of safety and slightly higher yields rather than sticking to a single product.”
Mr. Sudeep Bhatt, Director Strategy, Whiteland Corporation
“The RBI MPC has decided to reduce the repo rates at 5.25% and slashing it by 25 bps, as it meets for the last time this year. The stance is significant for the real estate sector. Reduced repo rate means more affordable home loans which directly boost housing demand, while improving liquidity for developers. The sector stands to benefit from the re-established buyer sentiment and a growth in investment appetite with EMIs set to fall and borrowing cost easing. The approach will improve clearance of unsold inventory and streamline project launches, with real estate being a primary driver in India’s economic growth.”
Mr. Mohit Agarwal, Business Head, Conscient Infrastructure Pvt. Ltd.
“The RBI’s decision to reduce the repo rate to 5.25% while maintaining a neutral policy stance reflects a cautious and balanced approach toward sustaining economic stability. Continued lower borrowing costs will help preserve affordability for luxury homebuyers and investors, thereby sustaining demand in high-end residential markets. This neutral stance, coupled with the MPC’s outlook, reinforces confidence among HNIs and NRIs to make strategic real estate investments. As a developer, we continue to benefit from predictable financing costs, enabling steady project execution. We anticipate sustained momentum in the luxury housing sector, especially in metro cities, as stable EMIs and attractive financing options continue to drive buyer confidence.”
Mr. Rishabh Periwal, Sr. Vice President, Pioneer Urban Land & Infrastructure
“The 25 bps reduction in the repo rate to 5.25% is a welcome step for the real estate sector. Lower borrowing costs will make housing loans more affordable, strengthening purchasing power and boosting demand, especially in end-user and aspirational segments. Developers stand to benefit as well, with improved financing conditions enabling faster project launches and timely delivery cycles. Overall, this move will further reinforce buyer confidence and support sustained growth across India’s real estate markets.”
Mr. Rajat Bokolia, CEO, Newstone
“With the repo rate reduction by 25 bps the new rate stands at 5.25%. The rate cut will improve the situation of homebuyers as there will be a moderation in interest rates on home loans, making housing an accessible option. Refinancing the existing home loans will be easier as the EMIs on loans will also reduce.”
Mr. Rohit Kishore, CEO, Hero Realty
“The RBI’s decision to reduce the repo rate to 5.25% while maintaining a neutral policy stance is a steady and reassuring move for the real estate sector. Stable borrowing costs will benefit both homebuyers and developers. For buyers, it means continued lower EMIs and easier access to home loans, which can encourage more people to buy homes. For developers, the sustained interest rates will help manage costs and finish projects on time. This policy continuity will boost confidence in the market and maintain demand for homes and office spaces. We expect the luxury housing segment to stay strong, especially in metro cities. Lower EMIs and better loan offers will make people more confident to buy. For the real estate industry, especially the residential sector, the RBI’s decision underlines stability and predictability, two factors widely regarded as essential for sustained market health. Stable rates and recent liquidity support from the central bank help developers manage project costs, push new launches, and keep housing supply robust. The continuation of favourable credit conditions and the steady pace of earlier rate cuts also maintain affordability, especially in the mid- and affordable housing segments, and underpin a cautiously optimistic outlook for the market.”
Mr. Mohit Malhotra, Founder & CEO, NeoLiv
“The RBI’s decision to reduce the repo rate to 5.25% while maintaining a neutral stance is a strategic approach to ensuring economic stability and controlling inflation. Lower interest rates would make financing more affordable for mid-segment projects, encouraging more people to own their dream home and fueling growth. For developers, this presents an exciting opportunity to accelerate project timelines, expand portfolios, and create more value for both investors and mid-segment customers, driving the real estate industry forward with renewed momentum.”
Mr. Shrinivas Rao, FRICS, CEO, Vestian
“A 25 bps rate cut signals a clear intent of monetary policy to support growth while inflation stays restrained. With borrowing costs declining, we expect project construction to accelerate and consumer demand to pick up significantly. For commercial real estate, lower funding costs and improved leasing activity are likely to fast-track occupier expansion and support new developments. This also brings better clarity for long-term investments and encourages broader credit expansion. Capital-intensive sectors and housing will particularly benefit from improved affordability. Such a calibrated step strengthens economic stability and supports the ongoing growth momentum.”
Mr. Piyush Bothra, Co-Founder & CFO, Square Yards
“The 25-basis point cut in the repo rate is a bold and welcome move in the current global macro environment. Despite the sliding rupee and other headwinds, this cut is a very strong signal by the RBI about the strength of the Indian economy and its decoupling from the rest of the world macro. This cut offers a meaningful boost to the real estate sector, reinforcing affordability at a time when buyer activity is already strengthening. With inflation well-managed, growth projections improving, and reforms sustaining consumption, the rate reduction builds positively on the earlier easing undertaken this year. Lower home loan rates, especially during the festive season, are expected to accelerate demand across mid-income and first-time buyer segments. For developers, the cut enhances credit conditions and lifts sentiment across the market.”
Mr. Vimal Nadar, National Director & Head, Research, Colliers India
“After a brief pause, RBI has reduced the repo rate further by 25 basis points to 5.25%, the lowest in over three years. This reduction in benchmark lending rates, coupled with the continuation of neutral stance, reflects the confidence in India’s economic resilience despite global uncertainties and a depreciating Rupee. GDP growth rate projection for FY 2025-26 has been revised upwards from 6.8% to 7.3%, supported by robust domestic demand & private consumption. Meanwhile consumer inflation is expected to remain benign at 2% during the ongoing fiscal year. For the real estate sector, especially the residential segment, this rate cut builds on the momentum created during the recent festive season and GST rationalization of key construction materials. Lower borrowing costs will further improve affordability and buyer sentiment, particularly in affordable & mid-income housing segments. Additionally, steady growth in average income levels can potentially drive property enquiries and boost housing sales in the next few quarters.”
Mr. Amit Goyal, Managing Director, India Sotheby’s International Realty
“The RBI’s 25-basis-point repo cut comes at the right time. Real estate is capital intensive, and after years of elevated construction costs, lower rates offer meaningful relief. Cheaper credit boosts confidence—from homebuyers to institutional investors and should drive demand, transactions, and price stability. With India posting 8.2 percent growth in Q2, the rate cut is a strong sail forward, reinforcing liquidity and sentiment in an already resilient economy.”
Mr. Jash Panchamia, Executive Director, Jaypee Infratech Limited
The RBI’s decision to cut the repo rate by 25 basis points comes at an opportune moment, with inflation under control and the economy on a stable footing. This move is expected to stimulate consumption across sectors, reinforcing overall economic growth. The housing sector, particularly affordable and mid-segment housing, stands to benefit as lower home loan rates are likely to encourage cautious buyers to make their purchase decisions. Consequently, this could create a positive ripple effect, driving demand for quality homes and further strengthening market activity, while supporting investment sentiment and fostering long-term confidence in the real estate ecosystem.
Mr. Ritu Kant Ojha, Dubai-based real estate strategist
“With today’s 25 bps cut following June’s reduction, the RBI has confirmed a sustained low-interest regime. A cumulative 75 bps easing in six months acts as a massive tailwind for domestic real estate volume. However, the data presents a paradox for the investor: while liquidity is easing, the Rupee breaching 90.43 signals that the ‘silent tax’ of currency depreciation is active.
This divergence between local asset prices and global purchasing power demands a shift in strategy. It is no longer about choosing one market over another. The sophisticated play is now ‘Geographic Arbitrage’: utilize cheaper domestic borrowing for capital appreciation in India, while anchoring liquid capital in Dollar-pegged markets like Dubai. In this macroeconomic climate, a balanced portfolio borrows where the rates are falling and generates yield where the currency is hard.”
Kanika Singh Chief Risk Officer– IMGC
“The RBI’s decision to cut the repo rate by 25 bps to 5.25% while maintaining a neutral stance reflects its confidence in the current inflation trajectory, which remains well within the comfort zone. The rate cut will provide relief to borrowers, as lending rates and EMIs are likely to ease further, supporting household cash flows and consumption. Although real GDP growth in Q2FY26 surprised on the upside—supported by strong private consumption and industrial momentum—nominal GDP continues to lag, justifying a supportive monetary stance. With the repo rate reduction, Home Loan borrowers are definitely expected to benefit. We have already seen some return on investment (ROI) benefits from the previous two rate cuts being passed on to borrowers. With a 25 bps rate cut, the home loan EMIs will come down substantially, provided the transmission occurs in real-time and not with a lag.The inflation outlook is also positive, supported by low core inflation.”
Kirthi Chilukuri, Founder & Managing Director, Stonecraft Group
“The RBI’s decision to cut the repo rate reflects its increasingly supportive stance in light of easing inflation and the need to stimulate demand. For sectors like real estate, where financing costs are a major determinant, the cut (to 5.25%) offers a favourable boost. However, long-term sustainability of the market will still hinge on broader economic recovery, the pace of demand, and government efforts to maintain fiscal balance. At Stonecraft Group, we remain committed to a resilient strategy, focusing on innovation, sustainability, and strategic investments, to navigate the evolving landscape and seize emerging opportunities.”
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