With the Reserve Bank of India lowering the repo rate to 6 percent, stakeholders across housing, finance, and investment interpret the move as a decisive signal that is shifting affordability, improving credit access, and realigning sector priorities.
India’s central bank has set the tone for economic direction in the new fiscal year. The Reserve Bank of India (RBI) announced a 25 basis point reduction in the repo rate, bringing it down to 6 percent. This second consecutive rate cut in 2025 was accompanied by a policy shift to an accommodative stance, a signal widely interpreted as pro-growth amid ongoing global headwinds.
For the real estate and financial services sectors, the repo rate cut is not just monetary easing; it is a green light for recalibrated strategies, stronger buyer sentiment, and enhanced credit optimism.
Homebuyers Receive Immediate Gains
Ashish Kukreja, CEO and Founder of Homesfy.in and mymagnet.io, detailed the financial benefits for property seekers.
“The repo rate reduction is a massive relief for homebuyers in the form of equated monthly installments for their homes. This is the second rate cut in a row, following a 25 basis points cut in February. The repo rate reduction to 6 percent lowers the cost of funds for banks, enabling them to pass on the benefit to consumers through lending rates.”
He explained that a home loan of ₹80 lakh over 20 years at 9 percent currently yields an EMI of ₹71,978. With a 50 basis point pass-through, this would drop to ₹69,426, an annual saving of over ₹30,000 and nearly ₹6.42 lakh across the loan term.
Developers Recognize the Sentiment Shift
Prashant Sharma, President of NAREDCO Maharashtra, framed the RBI decision in terms of its ripple effects across real estate.
“The RBI’s decision to reduce the repo rate by 25 basis points to 6 percent comes as a welcome and timely move for the Indian economy. At a time when global headwinds and tariff concerns loom large, the accommodative stance by the MPC will serve as a much-needed catalyst to revive consumption and investment cycles. For the real estate sector, this signals increased affordability for homebuyers and improved liquidity conditions for developers. It will directly impact housing demand, particularly in the affordable and mid-income segments, and will boost sentiments in the real estate sector. This policy stance will further encourage transparency and trust, essential for sustainable sectoral growth.”
Shraddha Kedia-Agarwal, Director of Transcon Developers, contextualized the macroeconomic value of lower rates.
“A rate cut in a controlled inflation environment is a strategic push towards economic revival. Lower interest rates make home loans more attractive and affordable, especially in metros like Mumbai where ticket sizes are higher. 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. It also reaffirms the RBI’s supportive approach towards economic revival through a healthy credit ecosystem.”
Nishant Deshmukh, Founder and Managing Partner of Sugee Group, noted that the cut could accelerate ownership intent.
“The recent repo rate cut by the RBI signals a proactive stance to stimulate growth and investment, particularly in the real estate sector. Reduced lending rates are expected to enhance home affordability, encouraging aspiring buyers to take that crucial step towards homeownership. For developers, improved access to capital will aid project execution and timely delivery.”
Samyak Jain, Director at Siddha Group, highlighted timing and psychological momentum.
“The RBI’s policy move is a strong signal of its commitment to support growth while leveraging the benign inflationary backdrop. It comes at an opportune moment, especially as we look to maintain the momentum in home sales post Gudi Padwa. A reduction in interest rates enhances affordability, which is the cornerstone of sales revival.”
Real Estate in Emerging Cities Gains Traction
Amrita Gupta, Director at Manglam Group, shared her view from the perspective of Tier 2 and Tier 3 cities.
“The RBI’s move to reduce the repo rate to 6 percent with an accommodative stance is a positive signal for the real estate sector. Lower borrowing costs are likely to spur housing demand, especially in the mid and affordable segments. At Manglam Group, we see this as a strong boost for Tier 2 and 3 cities, where infrastructure growth and rising aspirations are already driving real estate momentum.”
Luxury, Holiday, and NRI Segments See Strategic Gains
Aditya Kushwaha, CEO and Director at Axis Ecorp, connected the repo action to global investor trends.
“The RBI’s decision to cut rates comes at a significant juncture when NRI interest in Indian real estate is gaining momentum. With the rupee experiencing volatility, luxury real estate and holiday homes present a compelling hedge. This move is expected to boost sentiment across the premium housing segment, particularly in emerging lifestyle destinations.”
Developer Cash Flow and Execution Cycle Benefit
Mohit Goel, Managing Director of Omaxe Ltd, welcomed the policy as structurally aligned with market needs.“The RBI’s decision to reduce the repo rate by 25 basis points to 6 percent is a welcome move that aligns well with the current macroeconomic situation. With inflation showing signs of easing and growth requiring a gentle push, this cut will act as a catalyst for demand revival. Lower borrowing costs will not only improve homebuyer sentiment but also ease the financial burden on developers.”
Investment Markets Align with RBI’s Stance
Lakshmi Iyer, Chief Executive Officer of Investment and Strategy at Kotak Alternate Asset Managers, described the mood in investment circles.
“Tariff shock equal to rate cut therapy. This seems to be the formula that more central bankers are likely to adopt including RBI, which offered the recipe that markets were expecting. The icing on the cake was at stance change from neutral to accommodative. Inflation worries also seem to have abated given the sharp fall in crude oil prices. The downward revision in FY26 GDP forecast reflects the uncertain global environment, hence the agility in action. Fixed income to be favoured as a risk off in
Fixed Income Investors Read a Positive Signal
Mr. Mahendra Kumar Jajoo, Chief Investment Officer for Fixed Income at Mirae Asset Investment Managers (India), noted the broader direction this policy gives to the debt markets.
“RBI cut the key policy rate by 25 basis points as also switched to an accommodative stance. This clears the runway for continued positive momentum in fixed income markets. While the risk of a global disruption remains in view of the ongoing developments on tariffs, the guidance is for further cuts in forthcoming policies. Bond yields remained slightly higher immediately after policy announcement as the rates have eased significantly in the prelude but are expected to continue to soften going forward. It would seem that in the current environment of uncertainty, the central bank is going to do the heavy lifting yet again, as it did during COVID disruption. That suggests a supportive environment for fixed income in the immediate term.”
Ashwini Shami, Executive Vice President and Portfolio Manager, connected the policy to broader market expectations.
“Amid global tariff uncertainties, with the US economy grappling with inflationary pressures and recessionary concerns, the RBI’s rate cut signals confidence in India’s stable inflation outlook, a positive for overall consumption. Beyond consumer goods, lower borrowing costs are expected to provide a significant boost to housing finance. The RBI’s accommodative stance also indicates a conducive environment for private capital investments, enabling businesses to expand capacity and capture growth opportunities. This is particularly beneficial for Indian enterprises looking to strengthen their domestic presence and explore emerging global opportunities arising from the ongoing tariff war.”
NBFCs Look to Scale with Expanded Co-Lending Rules
Mr. Kishore Lodha, Chief Financial Officer at UGRO Capital, elaborated on a lesser-discussed but game-changing shift in RBI’s co-lending policy.
“This MPC policy appears to be a continuation of the various measures taken by the RBI over the last four to five months. Durable liquidity has been returning to the system over the past fortnight, thanks to these measures by the RBI. The change in stance to accommodative is consistent with this trend. The rate cut is a welcome move that will help ease the high interest rate regime we have experienced over the past three years, although the transmission of this rate cut needs to be monitored, as banks are under pressure while passing on the benefits to all customer segments due to higher borrowing and operational costs.”
He further explained the implications of regulatory broadening in co-lending.
“Initially, when the RBI guidelines were introduced, they applied only to priority sector lending loans. However, on a case-by-case basis, the RBI was granting approvals to banks for co-lending in non-priority segments. As per recent studies, about 75 percent of the co-lending volumes handled by banks are in non-priority loans. Now, the RBI has broadened the framework and made it applicable to all regulated entities and for all products. This will significantly broaden the scope of co-lending, and we will see banks scaling up volumes far beyond current levels.”
Sudipta Roy, Managing Director and CEO at L&T Finance Ltd., echoed similar optimism about the new rules’ potential.
“RBI’s reiteration of its pro-growth stance amidst current global backdrop is reassuring. Extending co-lending rules to all regulated entities and all loans could prove to be a game changer for the domestic financial sector over time. It presents a huge opportunity for NBFCs to build on their niche strengths and partnerships toward wider credit dissemination.”
