Real Estate Calls For Measured RBI Rate Cut As Prices Stay Elevated

With residential sales volumes stabilizing across the top seven Indian cities amid elevated prices, global headwinds, and geopolitical uncertainties, the real estate sector is now pinning its hopes on the RBI’s Monetary Policy Committee for further rate cuts.

Industry experts say that at this point, stability is needed more than aggressive cuts as steady rates make homebuyers' EMIs more predictable.

However, “lower rates are always welcome for the real estate industry. The RBI has already proactively lowered the repo rate by 50 basis points in June, and by a total of 100 basis points over the course of 2025. The current rate of 5.5 per cent is conducive for housing demand, and another cut would be even more so,” says Anuj Puri, Chairman, ANAROCK Group.

While rate cuts are by no means a cure-all panacea, lower lending rates do matter - which is why banks also need to more efficiently transmit all the previous cuts to borrowers.

“We expect the RBI to maintain a growth-supportive stance because inflation is within acceptable parameters. This will ensure the required liquidity to keep affordable and mid-range housing viable,” adds Puri.

With inflation steadily moving within the RBI’s comfort range and multiple high-frequency indicators pointing towards a gradual economic softening, the environment is now conducive for a calibrated easing.

“We expect the Monetary Policy Committee to announce a 25 basis points rate cut in the upcoming policy review,” says Raoul Kapoor, Co-CEO, Andromeda Sales and Distribution, adding that a rate cut at this juncture would provide meaningful relief to borrowers - particularly those servicing big-ticket loans such as home loans and auto loans.

“It would help lower the overall cost of credit and, in turn, stimulate demand across key consumption-driven and investment-led sectors of the economy,” he says.

A measured rate cut will also signal confidence in the economic outlook while supporting growth momentum. Easing rates will strengthen credit flows, encourage capital formation, and contribute to a more robust and broad-based economic recovery.

“Homebuyers today are extremely price sensitive, and even a small reduction in the borrowing cost can make a big difference in their decision to purchase. We believe that a measured cut in the present 5.50 per cent repo rate will support affordability and boost confidence in the housing market. While the sector has remained resilient, a supportive interest rate environment will encourage more aspiring buyers to step forward and invest in their own homes,” says Parvinder Singh, CEO, Trident Realty.

B K Malagi, Vice Chairman, Experion Developers, says, “We operate in a market where high borrowing costs directly impact buyer sentiment and project viability. Even though a rate cut will not lead to affordability, especially in the luxury housing segment, but it would provide crucial momentum. We expect the RBI to acknowledge the sector's multiplier effect and move towards a more accommodative stance to stimulate growth and ease the financial burden on homebuyers."

Developers say the real estate sector, being highly rate-sensitive, welcomes any move by the Reserve Bank of India to ease interest rates, as it directly enhances housing affordability, boosts liquidity, and strengthens demand momentum. Lower borrowing costs make home loans more accessible and improve financial feasibility - a key trigger for both end-user and investor decisions, including in premium segments.

“From a macro standpoint, the current environment is increasingly supportive of a calibrated easing. Inflation remains within RBI’s target band, GDP growth has surprised on the upside, and global central banks have started signalling the end of their tightening cycles with more dovish tones. A measured rate cut at this stage would further soften EMIs, expand buyer sentiment, and provide a fresh tailwind to housing demand,” says Manik Malik, CEO, BPTP.

This momentum is already being well-supported by India’s sustained infrastructure push — including expressways, urban transit, and digital public goods — which is unlocking new real estate corridors and deepening urbanisation. “Combined with regulatory stability and improved capital access, these structural tailwinds will ensure long-term sectoral growth and reinforce buyer and investor confidence across the board,” adds Malik.

Mayank Jain, CEO, KREEVA, says, “Affordability, to a large extent, hinges on construction costs, land prices, and availability of finance. While it is universally agreed that a rate cut would immediately boost purchasing power and demand, however, our broader expectation from the RBI is consistent: growth-oriented policies, which we are sure the MPC would be deliberating upon."