Sales of affordable-mid income homes may rise on lower mortgage rates: Realtors on RBI policy

New Delhi: Real estate developers expect sales of housing properties, especially units costing below Rs 1 crore, to rise following the RBI's decision to reduce the repo rate, a move that will prompt banks to reduce interest rates on home loans.

Realtors' apex bodies CREDAI and NAREDCO, which have more than 16,000 developers as members, hailed the RBI's move to reduce the repo rate by 25 basis points, saying this will stimulate housing demand. Builders urged banks to pass on the benefit to their customers.

According to PropEquity and Anarock data, housing sales declined 23 per cent and 28 per cent, respectively, annually during the January- March quarter of this year.

Commenting on the move, CREDAI National President Boman Irani said the rate cut is well-timed to uplift consumer sentiment and enhance borrowing capacity, especially in the housing sector.

"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," Irani said.

NAREDCO National President G Hari Babu said the RBI decision will give a boost to the real estate sector.

"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," he said.

Among developers, Venkatesh Gopalakrishnan, Director Group Promoter's Office and MD of Shapoorji Pallonji Real Estate (SPRE), described it as a positive development for the real estate sector. "Lower interest rates directly translate into reduced EMIs, thereby improving home loan affordability for potential buyers."

Sanjay Dutt, MD and CEO, Tata Realty and Infrastructure Ltd, said, "For the real estate sector, this monetary easing creates a favourable lending environment that could potentially stimulate housing demand across key markets." Manoj Gaur, CMD of Gaurs Group and Chairman of CREDAI National, said the RBI’s decision to reduce the repo rate will have a positive impact on the real estate sector.

Gurugram-based Signature Global Chairman Pradeep Aggarwal said this proactive move is expected to significantly boost homebuyer sentiment.

Hyderabad-based Aparna Constructions Director Rakesh Reddy said, "This move, coupled with recent tax benefits, will significantly enhance affordability for homebuyers, particularly in the mid-premium and affordable housing segments." Ashok Kapur, Chairman of Krishna Group and Krisumi Corporation, said the two consecutive policy rate reductions by the RBI are expected to benefit home buyers.

Hawelia Group MD Nikhil Hawelia said the RBI decision will help improve sales of homes below Rs 1 crore, but there will not be much impact on sales of luxury homes.

Bengaluru-based Sterling Developers CMD Ramani Sastri said this is a positive decision and hoped for further reductions in interest rates, which would provide an added impetus not just to the real estate sector but also to broader industrial activity and economic growth.

Mohit Malhotra, Founder of realty firm NeoLiv, said this rate cut is likely to boost buyer sentiment and drive housing demand.

Shraddha Kedia-Agarwal, Director of Mumbai-based Transcon Developers, said, "This move will act as a catalyst to improve buyer sentiment, accelerate decision-making, and will go a long way in supporting the real estate sector’s momentum, particularly for end-user driven and premium housing segments."

Uddhav Poddar, CMD of NCR-based Bhumika Group, said lower borrowing costs will ease access to capital, broaden the investor pool, and open new avenues for expansion.

Bengaluru-based Sanjeevini Group Chairman Umesh Gowda HA said the two consecutive rate cuts will give a fillip to the housing sector as rate cut transmission by banks will lead to home loan rate falling below 8 per cent.

Ramesh Menon, Founder Director of Delhi Consortiums, noted that lower borrowing costs directly benefit both homebuyers and developers, potentially boosting housing demand and improving liquidity across the value chain.

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 per cent annually to nearly 1.06 lakh units during January- March across nine major cities. Anarock data showed that housing sales fell 28 per cent in the January-March period across seven major cities to 93,280 units.