How the RBI’s 14-Term Pause and Reductions in Repo Rate Have Impacted Indian Real Estate Market?
The Reserve Bank of India’s extended monetary policy stance has played a pivotal role in shaping India’s real estate trajectory. After maintaining the repo rate at 6.5% across 11 consecutive policy reviews through 2024, the RBI initiated a sharp easing cycle in 2025—cutting the rate to 6.25% in February, 6.00% in April, and finally 5.5% in June. This 100-basis-point reduction over three terms marks the most aggressive rate cut in recent years and has significantly improved borrowing conditions, particularly for the housing sector.
The impact has been particularly transformative in Delhi-NCR. As home loan rates fell to multi-year lows, affordability surged, fueling both homebuyer sentiment and transaction volumes. Housing sales value in Delhi-NCR rose sharply in 2024, growing 63% YoY to ₹1.53 lakh crore, with Gurugram alone contributing over two-thirds of this figure. Simultaneously, average property prices surged by 31%—the steepest among all major Indian cities—largely driven by increased demand in luxury and premium housing.
The stable and now declining interest rate regime also spurred supply-side activity. Developers, confident in the market’s strength, launched nearly 6,300 high-end residential units in Q1 2025, of which approximately 5,400 units were sold—reflecting robust absorption levels. This growth is further supported by ongoing infrastructure upgrades and an increasing preference for gated, amenity-rich communities among affluent buyers and investors.
Gaurav K Singh, Founder & Chairman, Womeki Group said, "The RBI’s decision to reduce the repo rate by 50 basis points to 5.50% is a timely and progressive step that will bring renewed energy to the real estate sector. With home loan rates set to come down, the affordability factor improves significantly, especially for the aspiring middle class and upwardly mobile buyers looking for long-term value. In this context, plotted developments stand out as a highly attractive option — offering the dual advantage of land ownership and the flexibility to design one’s own home. This aligns perfectly with the rising demand for luxury yet affordable living, where buyers seek quality infrastructure, gated environments, and modern amenities, but at prices that remain within reach. We are already seeing strong interest in our plotted development offerings, and we expect this rate cut to further accelerate demand — particularly in well-connected, fast-developing micro-markets and smaller cities. The move also signals a pro-growth policy stance, which is essential for sustaining real estate momentum and encouraging developers to invest confidently in future-ready, community-driven projects."
Beyond premium apartments, plotted developments are also witnessing rising interest—especially among aspirational buyers looking for flexible and personalized living options. Developers note that this shift is closely linked to improved affordability, enabled by lower EMIs and better financing terms post-rate cuts.
Abhishek Singh, Director, V3 Infrasol, added, "The RBI’s decision to cut the repo rate by 50 basis points to 5.50% is a much-needed catalyst for real estate, especially at a time when buyer aspirations are shifting toward personalized, spacious, and future-proof living. Plotted developments are becoming the preferred choice for discerning homebuyers who want the luxury of space, privacy, and freedom to build — all within an affordable framework. This repo rate cut directly enhances affordability by reducing EMIs and increasing loan eligibility, thereby bringing many fence-sitters into the market. We have witnessed a clear rise in interest for plotted projects that offer premium infrastructure, secure gated communities, and long-term value. With this policy push, we expect the trend to strengthen further, particularly in emerging urban zones, where plotted developments offer an ideal blend of investment potential and lifestyle flexibility. This move by the RBI reinforces our confidence in the market’s growth trajectory and the evolving preferences of the modern Indian homebuyer."
“The RBI’s decision to cut the repo rate by 50 bps to 5.5% is a welcome move for the premium real estate segment. After 11 consecutive rate holds, this reduction is expected to provide a much-needed boost to housing demand by making home loans more affordable. Lower borrowing costs will enhance affordability for luxury homebuyers and investors, boosting demand in high-end residential markets. This rate cut, coupled with the MPC’s neutral stance, signals stability, encouraging HNIs and NRIs to make strategic investments. We as a Developer may also benefit from reduced financing costs, enabling faster project execution. We anticipate renewed momentum in the luxury housing sector, especially in metro cities, as lower EMIs and attractive financing options drive buyer confidence,” said Mr. Mohit Agarwal, Business Head, Conscient Infrastructure Pvt. Ltd.
The current monetary policy direction—marked by rate stability followed by calibrated cuts—is expected to reinforce Delhi-NCR’s position as a leading real estate destination. The combination of improved affordability, investor interest, and premium supply pipeline places the region on solid footing for continued momentum through the rest of 2025. Developers are optimistic that the evolving rate cycle will support sustained demand across both premium and plotted segments, while also enabling faster project execution and wider participation from HNIs, NRIs, and aspirational buyers.
