The Reserve Bank of India's Monetary Policy Committee, headed by Governor Sanjay Malhotra, decided by a unanimous vote to reduce the repo rate by 25 basis points to 5.25 percent. This is the fourth such cut this year and the total easing in 2025 has thus been raised to 125 basis points. The physically neutral position of the MPC is changed to reflect the sharp downward trend in inflation. Consumer price inflation reached a low of 0.25 per cent in October, the lowest level since the flexible inflation targeting regime was put into place, and this prompted the RBI to lower its FY26 inflation estimate to 2 per cent.
Moreover, the central bank in its communication alongside the rate action has real GDP growth forecast for FY26 at 7.3 per cent. This change of opinion was mainly due to loud domestic demand, better consumption in the rural sector and the continuation of the high-frequency data trend. The GDP annualized quarterly growth rate in the Q2 of FY26 was 8.2 percent, the highest in six quarters, padding the gross value added increase which was also strong at 8.1 percent, and implying the strengthening not only of industry but also of the services sector. In order to keep liquidity stable and comfortable, the RBI will be doing open market operations with government securities worth ₹1 lakh crore in December. Another instrument is a three-year, USD 5-billion buy-sell swap. Governor Malhotra explained that these moves are to keep liquidity conditions orderly and not to bring about mechanical changes in yields.
Cut in Rate Impacting Housing Sentiment
The lowering of the repo rate by 25 basis points is a timely intervention that makes housing demand a little easier, and thus the mood among buyers is already optimistic in most of the large cities. Rallying mortgage rate trends are likely to bring down the home loan EMIs, which is a nice surprise for new buyers and helps existing floating-rate borrowers too. Developers expect a head of inquiry and conversion rates through the rest of the fiscal year, especially in mid-income and premium segments where people are very sensitive to borrowing. On the back of inflation slowing down and liquidity conditions remaining stable, players in the industry are stating that a better funding environment is to be expected for the new project launches and the construction pipeline. The aggregate scenario for residential sales, mortgage disbursals and buyer sentiment will be getting stronger if the rate-cut cycle persists.
Real Estate Industry Expert Opnions
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.”
Rajat Khandelwal, Group CEO, Tribeca Developers,
"The RBI’s decision to reduce the repo rate to 5.25% is a welcome move that will provide much-needed relief to homebuyers, especially in premium markets like MMR, NCR, and Pune, where rising EMIs have impacted affordability. Lower borrowing costs not only improve financial predictability but also strengthen buyer confidence. At Tribeca, we believe that stable and reasonable financial costs will play a crucial role in sustaining real estate growth, ensuring continued demand and greater accessibility for aspiring homeowners."
Ms. Manju Yagnik, Vice Chairperson, Nahar Group & Senior Vice President, 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. 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. 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. Dharmendra Raichura, VP & 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. 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. 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. Ashok Kapur, Chairman, Krishna Group & 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. 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. 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. 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. 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."
Mr. Samir Jasuja, Founder & CEO, PropEquity, NSE-listed real estate data analytics firm
"The RBI’s continued reduction in the repo rate is a welcome move, especially in the backdrop of easing inflation and strong GDP growth. Lower borrowing costs provides a cushion to homebuyers against rising property prices thereby accelerating decision-making among fence-sitters. Developers, too, are responding to this evolving demand landscape. A noticeable increase in new launches within the ₹2–5 crore segment indicates strategic alignment with buyer preferences. This segment, in particular, stands to benefit significantly from the consistent reduction in home loan rates, which is likely to further support real estate momentum. Overall, the policy move is poised to give a strong fillip to volume-led sales across key geographies, reinforcing growth and confidence across the real estate ecosystem."
The RBI's decision to lower the repo rate by 25 basis points to 5.25% is primarily a measure to extend credit at favorable terms in order to revive demand and then growth. This is a typical monetary policy move to stimulate demand in an economy. By lowering the rate, the central bank is giving easy money to the people through commercial banks. Hence lower interest rates will be more attractive to customers in general and in the case of housing loans or any loans in particular. This would automatically reduce the equated monthly installments (EMIs) of loans and make more people eligible for loans. As a result, the demand for housing is expected to rise. At the same time, developers will also be motivated to inject more capital into new projects and expand their business since the cost of their borrowings will decrease.
Sectoral leaders and experts responded positively to this decision taken by the Reserve Bank of India. They consider the move as a major source of benefits for the segment of first-time homebuyers, the mid-income and luxury housing segments, and non-resident Indians (NRIs) and investors. Besides that, they also see another benefit from the move in the form of the opportunity for a lower rate on already existing loans (refinancing) and faster project execution. After considering various effects of the rate reduction, the move can be viewed as instrumental in preserving the real estate sector's upward trend (momentum), improving cash flow (liquidity), and encouraging long-term capital inflows into the sector as the country is progressing toward
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