Rate Cut: Rate relief may boost demand for homes, boosting industry confidence

News Topical, Digital Desk : The Reserve Bank of India's (RBI) decision to reduce the repo rate by 25 basis points to 5.25% is buoying the real estate sector. Developers and property consultants believe this will boost housing demand in the near future, while also making homes more affordable. This will boost buyer confidence in the market. According to developers, this reduction—the third this year—comes at a time when inflation has moderated and the country's GDP growth has exceeded expectations. This has created a favorable environment for housing sales.

New customers may also come in.

Many market experts believe that lower borrowing costs could bring back potential buyers who were previously hesitant to make decisions, especially end-users and first-time homebuyers. Deepak Kapoor, director of the Gulshan Group, said that the repo rate, now at a three-year low, has "boosted the real estate sector" and is in line with positive inflation and GDP growth indicators. Pratik Tiwari, MD of the Pratik Group, said that the reduction "significantly reduces EMIs" and could make the last quarter of the year more active, especially in the premium and luxury segments in Noida and Greater Noida. Rajjath Goyal, MD of the MRG Group in Gurugram, said that the move "improves EMI affordability and strengthens sentiment," especially among buyers upgrading their homes in the luxury category. Developers in South India are also seeing similar trends. Ramji Subramanian, MD, Sowparnika Projects, said that lower interest rates and GST reforms together will create favourable conditions for mid-segment and aspirational housing. Madhusudan G, CMD, Sumadhura Group, said that the reduction is a “timely incentive” that will bring more end-users and first-time homebuyers into the market. Improved liquidity and a favourable credit environment will give developers more confidence in timely completion of projects. Manan Joshi, co-founder, Sarvam Properties, said that lower interest rates have come at a time of “strong economic growth and controlled inflation”, which could boost middle-income housing demand.

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