• Source:JND
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In a big step to boost the Indian economy, the Reserve Bank of India (RBI) has cut the repo rate by 50 basis points, lowering it to 5.5%. This is the third rate cut in a row in 2025, amounting to a total cut of 100 basis points so far this year.

To complement this, the RBI has also announced the phased lowering of the Cash Reserve Ratio (CRR) by 100 basis points that would be effective from four tranches beginning September 2025. This tactful move will inject around Rs 2.5 lakh crore into the banking system, thus augmenting liquidity and facilitating banks to give more credit to sectors such as real estate.

Implications for Homebuyers and Developers

These monetary policy moves are set to significantly influence the real estate industry. For buyers, the decrease in the repo rate means lower home loan interest rates, which reduce housing costs and EMIs. For developers, the additional liquidity and lower borrowing costs will likely ease the process of starting and completing projects, particularly in emerging growth corridors.

Industry Perspectives-

Amish Bhutani, MD, Group 108, said that RBI’s third consecutive repo rate cut by 50bps signals continued confidence in India’s economic growth story. This decisive move is set to unlock greater capital inflows, especially into high-impact sectors like real estate. Wherein, the commercial segment stands to benefit the most from easier financing. At a time when the country seeks robust economic growth, this rate cut would act as a timely catalyst, which would help attain the same.

Surender Kaushik, Founder and Managing Director, ARIPL, highlighted the timely nature of the decision, says, "The RBI’s decision to bring the repo rate to 5.5% comes at the right time. The announcement strongly aligns with the real estate sector, as a reduction in home loan rates will appeal to buyers. While developers may seize this opportunity to scale up projects in new growth corridors. Hence, the announcement will add a new vigour to the sector."

Umesh Rathore, VP Sales & Marketing at VVIP Group, says, We welcome the decision of the RBI to cut down the repo rate by 50 basis points to boost overall housing demand and improve sales performance. In the current economic environment, this reduction is going to provide much-needed relief to both homebuyers and developers due to lower borrowing costs and easing liquidity.

With the RBI changing its monetary policy framework to 'neutral' from 'accommodative', future rate cuts will now be dictated by changing economic indicators, especially inflation and growth patterns.

The prevailing policy interventions, nevertheless, are likely to offer prompt relief and stimulus to the real estate market, incentivising homebuyers and developers alike to participate actively in the market. With the sector reacting to such encouraging conditions, an upsurge in housing demand and project launches is likely, which will have a positive impact on the overall economic environment.