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Housing sales are expected to rise after the RBI cut the repo rate by 25 basis points, say real estate bodies CREDAI and NAREDCO. This move is likely to lower home loan interest rates, boosting demand for affordable and mid-income homes. CREDAI President Boman Irani said the rate cut supports growth during global uncertainty and will improve affordability. NAREDCO's G Hari Babu added that cheaper loans may increase sales, reduce unsold inventory, and encourage new project launches. Commercial real estate is also set to benefit. Housing sales had dropped in early 2025 due to high prices and fewer launches, with up to 28% declines reported in major cities.
Housing sales will rise following the RBI's decision to cut the repo rate as interest rates on home loans are likely to come down, according to realtors' apex bodies CREDAI and NAREDCO. Advertisement
The two associations, which have more than 16,000 developers as members, welcomed the RBI's move to reduce the repo rate by 25 basis points, saying this will stimulate real estate demand, especially of affordable and mid-income homes.
Commenting on the move, Boman Irani, President of CREDAI National, said, "At a time of global economic volatility caused by increasing tariffs and geopolitical tensions, this move reflects a continued shift toward a pro-growth stance amid easing inflation and a stabilizing macroeconomic outlook."
He further added, "It is likely to improve home loan affordability, stimulate housing demand, and provide a strong impetus to the mid-income and affordable segments, where interest rate sensitivity remains high,"
G Hari Babu, National President of NAREDCO, said the RBI decision will give a boost to the real estate sector. He further added, "lower interest rates will make home loans affordable, which may boost housing demand across categories. This will result in increased residential sales, better liquidity in the market, and a gradual depletion of unsold inventory." According to him, this will also encourage developers to launch new projects, especially in the affordable housing segment.
Commenting on the impact on commercial real estate, he added, "With the reduction in borrowing costs, more aspiring homeowners may enter the market, which will help bridge the demand-supply gap in the sector. Commercial real estate will also benefit, as easier financing may encourage businesses to expand and invest in office and retail spaces."
Housing sales have fallen in the first quarter of the 2025 calendar year because of high prices, lower launches and economic growth uncertainties. Real estate data analytics firm PropEquity data showed that housing sales declined 23% annually to nearly 1.06 lakh units during January- March across nine major cities. Housing sales fell 28% in the January- March period across seven major cities to 93,280 units, according to Anarock.
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