RBI's 50bps rate cut to boost housing sales, reduce builders' borrowing cost: CREDAI & NAREDCO

New Delhi, Jun 6 (PTI) Realtors' apex bodies CREDAI and NAREDCO hailed the RBI decision to cut repo rate by 50 basis points, saying that this bold and timely step will improve consumer sentiment and boost housing sales, especially of low-cost homes.

On Friday, the RBI cut interest rates by 50 basis points, a third consecutive reduction, and unexpectedly reduced the cash reserve ratio for banks to provide a major liquidity fillip to support the economy amid geopolitical and tariff headwinds.

Welcoming the decision, CREDAI President Shekhar G Patel said the move will result in a lowering of interest rates on home loans, immensely benefitting mid-income and affordable housing segments, which have been struggling in the last few years.

"We welcome the RBI's decision and view it as a bold and timely step toward stimulating domestic demand," Patel said.

G Hari Babu, National President of NAREDCO, said, this is a timely and welcome step for the real estate sector.

"As banks pass on the benefits of the rate cut, home loan EMIs (equated monthly installments) will come down, making homeownership more affordable, particularly for first-time buyers and the middle-income segment," Hari Babu added.

Echoing similar views, Patel of CREDAI -- representing more than 13,000 developers from across India -- said the lower lending rates will directly enhance home loan affordability, particularly in interest-sensitive categories like mid-income and affordable housing.

"Reduced EMIs are expected to significantly improve buyer sentiment and encourage first-time homebuyers to enter the market," the CREDAI president said, adding that the cumulative 100 basis point reduction over the last six months is a strategic move.

Patel noted that this will have a positive impact on the affordable housing sector, which has been under pressure on both the demand and supply sides.

"Lower interest rates will increase homebuyer affordability and improve the financial viability of affordable housing projects," he said.

According to many property consultants, housing sales declined across 7-8 major cities in the January-March quarter compared to the year-ago period.

G Hari Babu said lower interest rates will improve liquidity, make credit more accessible, and boost consumer spending, all vital for sustaining the economy’s momentum.

On the supply side, the NAREDCO President said real estate developers will benefit from lower borrowing costs, easing the financial burden on ongoing and upcoming projects.

"This will not only help maintain a steady pace of construction but will also benefit the many allied industries that depend on real estate," Hari Babu said.

"It will lift market sentiment, revive housing demand, and create a ripple effect across sectors. Over the next few months, we expect to see a tangible and positive impact both on the real estate industry and the overall economy," said the president of NAREDCO, which has around 5,000 members across several states. PTI MJH DR