Good time to buy a new house? Here's what real estate experts say after 100 bps repo rate cut

RBI's decision to go for a bumper repo rate cut is expected to make home-buying affordable and revive interest in the mid-income and premium housing segments. This will be possible as home loan rates are expected to go down in response to the repo rate cut.

"The RBI’s decision to reduce the repo rate by 50 basis points is a strong and timely intervention, especially amid early signs of demand moderation in the residential sector," said Manju Yagnik, Vice Chairperson of Nahar Group and Senior VP, NAREDCO, Maharashtra.

"This rate cut is poised to create a significant improvement in affordability, especially for first-time purchases. This will help revive interest in mid-income and premium housing segments," Yagnik added.

"We believe this will have a positive impact on the real estate sector, particularly the mid- and high-end segments, as interest rates become more affordable with reduced EMI and improvement in loan eligibility," Aman Sarin, Director & Chief Executive Officer, Anant Raj Limited.

Pradeep Aggarwal, founder and chairman of Signature Global (India), said, 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.

"Additionally, the positive market sentiment around the possibility of further rate cuts this financial year bodes well for the real estate sector, paving the way for sustained growth and renewed confidence in the housing market," said Aggarwal.

Impact on home loan interest

Real estate experts are banking on lower home loan interest rates due to the repo rate cut.

"Lowering the repo rate to 5.5% will have a cascading effect across the lending ecosystem, bringing home loan interest rates well below 7.75%—a highly encouraging development for both existing and prospective homebuyers," said Nahar.

"For developers, available cheaper credit will ease liquidity constraints, accelerate project implementation, and improve delivery timelines. This will, in turn, provide much-needed cash flow to absorb the unsold inventory while generating fresh buyer interest that is good for the real estate value chain as a whole," she added.

Sarin said that for both existing and new borrowers, this cumulative 100 basis point reduction will provide significant relief in terms of reduced interest burden.

Anshuman Magazine, Chairman and CEO, India, South-East Asia, Middle East and Africa, CBRE said, “This reduction is expected to lead to lower borrowing costs, increased liquidity, and enhanced consumer spending power. For the real estate sector, this move is particularly beneficial as it will make home loans more affordable, stimulating demand and driving growth. The reduced interest rates will also encourage developers to take on new projects, boosting construction activity and creating employment opportunities."

Jash Panchamia, executive director at Jaypee Infratech Limited, said the RBI’s decision to slash the repo rate by 50 basis points and the CRR by 100 bps is clearly aimed at fueling consumption and accelerating investment, especially with inflation remaining within the central bank’s comfort zone.

"With several scheduled commercial banks already offering home loans below 8 percent, today’s decision may lead to a broader transmission of lower rates across the lending ecosystem. This will not only ease the financial burden on borrowers but also enhance affordability across housing segments, offering significant relief to homebuyers and providing a timely push for those planning property purchases," he added.