RBI Rate Cut Sparks Optimism in Real Estate Market

The RBI's decision to cut the repo rate by 25 basis points is anticipated to boost housing sales as interest rates on home loans drop. Realtors' bodies CREDAI and NAREDCO expect this to particularly stimulate demand in affordable and mid-income housing segments, addressing the sector's current challenges.

In a strategic move to stimulate the real estate market, the Reserve Bank of India (RBI) recently reduced the repo rate by 25 basis points. This decision is widely expected to lower home loan interest rates, thereby enhancing housing affordability and demand. The move has been welcomed by the real estate sector, particularly organizations like CREDAI and NAREDCO that represent over 16,000 developers.

Boman Irani, President of CREDAI National, highlighted that the rate cut comes at a critical juncture of global economic instability, underlining a pro-growth stance from the RBI. The decision is seen as a potential catalyst for increased borrowing ability and improved consumer confidence, especially in affordable and mid-income housing segments where sensitivity to interest rates is significant.

NAREDCO's National President G Hari Babu believes this policy shift will invigorate the real estate sector by making home loans more affordable, potentially boosting sales and reducing unsold inventory. The commercial real estate sector is also predicted to benefit, as businesses may find it easier to finance expansion initiatives. Overall, the RBI's decision is perceived as a supportive measure for sustaining growth and stabilizing the broader economy.

(With inputs from agencies.)