Business EconomyPosted at: Dec 5 2025 3:26PM


Real estate sector hails RBI’s rate cut, expects it to raise housing demand

New Delhi, Dec 5 (UNI) The real-estate sector on Friday reacted with clear optimism to the Reserve Bank of India’s 25-basis-point repo rate cut, seeing it as a timely catalyst that could unlock fresh buying momentum and deepen investor participation at a time when demand remains structurally strong.
Industry leaders said the cut to 5.25 per cent- RBI’s fourth in 2025- comes at a crucial juncture, easing borrowing costs just as homebuyers across metros and emerging cities grapple with firm prices and rising lifestyle aspirations.
With the RBI also projecting stronger GDP growth and a softer inflation trajectory, the sector sees an environment where sentiment, affordability and macro fundamentals are aligned more closely than they have been in recent quarters.
Ashish Narain Agarwal, Founder & MD of PropertyPistol, said the move directly lifts homebuyer confidence in high-cost metros like Mumbai, where affordability is often the biggest hurdle.
The EMI relief- around Rs 750–800 on a Rs 50-lakh loan—may appear modest, but Agarwal said it often serves as the psychological trigger that nudges salaried buyers toward immediate purchase decisions.
He also noted that existing borrowers have a strategic opportunity to shorten their loan tenures by keeping EMIs constant, while refinancing could be a smart move if lenders delay passing on the rate cut.
Vishal Raheja, Founder & MD of InvestoXpert Advisors, said the sentiment boost extends beyond end-users. Markets such as Goa, Bengaluru and Delhi-NCR- already witnessing strong lifestyle-driven demand- could see sharper traction as the cost of capital softens.
He pointed out that a 25-bps reduction brings a Rs 900-1,200 monthly savings on a Rs 60-lakh loan, improving the viability of second homes, investment units and plotted developments.
Lower interest rates, he added, strengthen rental-yield math and improve exit visibility for investors eyeing a 2-4-year horizon.
Adding to the optimism, Pyush Lohia, Director of Lohia Worldspace, said the rate cut combined with the RBI’s upgrade of GDP growth to 7.3 per cent sends a clear message of stability. This, he said, is particularly significant for Tier-2 markets where rising aspirations meet the need for quality, affordable housing.
Lower borrowing costs, according to him, will empower first-time buyers while giving developers confidence to pursue long-term, sustainable projects instead of short development cycles.
With the central bank maintaining a neutral stance and projecting easing inflation, analysts expect the lower-rate environment to widen the buyer base and speed up transaction cycles. Developers say the coming quarters could see increased footfall, faster conversions and stronger activity across well-located residential hubs and holiday-home markets, provided banks move swiftly to transmit the benefits of the repo rate cut.
UNI SAS
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