India’s real estate industry has hailed the Reserve Bank of India’s latest 25-basis-point rate cut, terming it a “decisive and confidence-boosting move”. The key lending rate cut, amid a low-inflationary environment and better-than-expected GDP growth, will prompt banks to transmit previous rate cuts more aggressively.

Also, with Q2 FY26 GDP surging 8.2% and headline inflation crashing to record lows, the decision to bring the repo rate down to 5.25% is being viewed by developers and real estate consultancies as a “booster dose” to the economy, as it’ll ease EMIs, reduce capital costs, and improve affordability. 

Developers’ comments on RBI rate cut

For some developers, it would support the ongoing momentum of overall economic growth, strengthening demand and investment activity. “The real estate sector has remained on a steady growth trajectory, as the prior cumulative repo-rate reduction of 100 bps by the RBI, coupled with income-tax relief given in the Union Budget and GST rate rationalisation earlier this year, has not only made home loans cheaper but has also significantly improved overall affordability for homebuyers,” says Pradeep Aggarwal, Founder & Chairman, Signature Global (India).

Explaining how today's move will benefit both homebuyers and developers, Rohit Kishore, CEO, Hero Realty, said, "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.”

As a result of the RBI’s decision on the repo rate today, the resultant lower borrowing costs are expected to significantly improve home-buyer affordability and further uplift sentiment in a market already witnessing strong end-user traction. 

Yateesh Wahaal, Director, M3M India, said it is a constructive and growth-aligned move that strengthens the sector’s outlook for 2026 and beyond. “For developers, the reduction in capital costs provides much-needed headroom for faster project execution, product innovation, and stronger liquidity management. This policy direction underscores the RBI’s calibrated approach—supporting economic expansion without compromising financial stability.” 

Market participants also believe that, specifically in premium markets like MMR, NCR, and Pune, it’ll provide relief, as rising EMIs have impacted affordability. “Lower borrowing costs not only improve financial predictability but also strengthen buyer confidence. Stable and reasonable financial costs will play a crucial role in sustaining real estate growth,” says Rajat Khandelwal, Group CEO, Tribeca Developers.

In pivotal markets like Mumbai, the RBI’s move is expected to accelerate demand for well-planned, future-ready residential communities. “If the direction holds, we anticipate further improvement in affordability, deeper institutional confidence, and continued consolidation of developers who operate transparently and at scale,” says Vijay Wadhwa, Chairman of The Wadhwa Group. 

The real-estate sector as a whole stands to benefit from the re-established buyer sentiment and a growth in investment appetite, with EMIs set to fall and borrowing costs 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,” says Sudeep Bhatt, Director Strategy, Whiteland Corporation.

With a total cumulative rate cut of 125 basis points in 2025, demand for upcoming housing launches is likely to gain further momentum. “Supported by this combination of rate cuts, low inflation, and strong economic growth, the economy is well positioned for a virtuous cycle of consumption, investment, and sectoral expansion,” says Nitin Bavisi, CFO, Ajmera Realty.

Improved borrowing costs are expected to bring greater confidence to end users and accelerate decision-making among families who have been evaluating long-term ownership. “For developers operating in emerging cities, reduced funding pressure also helps maintain construction momentum and encourages investment in new residential supply,” Amrita Gupta, Director, Manglam Group, says.

'RBI’s move builds on momentum created during festive season'

Real estate consultancies see the repo rate cut building on the momentum created during the recent festive season, and GST rationalisation of key construction materials. “Lower borrowing costs will further improve affordability and buyer sentiment, particularly in affordable & mid-income housing segments,” says Vimal Nadar, national director & head, Research at Colliers India.

Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said that for real estate, it’ll boost the demand and strengthen investment sentiment across segments. For home loan borrowers, this might bring tangible relief as floating-rate EMIs will ease. “We expect the market momentum to accelerate further in the coming weeks and hope for greater demand in mid and affordable segments."

The average housing prices across the top 7 cities have risen by notable double-digits (approx. 10%) in 2025 as per ANAROCK Research. The rate cut can encourage aspiring homebuyers who had paused their decisions due to price hikes to finally take the plunge. “The rate cut is a distinct sentiment multiplier for year-end sales,” says Anuj Puri, Chairman, ANAROCK Group.

However, the real impact hinges on the effective transmission of these benefits. “If banks swiftly pass on this rate cut to borrowers, we anticipate a renewed surge in sales velocity carrying firmly into Q1 2026. The current trends indicate that luxury homes will continue to drive residential real estate in 2026, as well,” he adds.