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India's real estate industry bodies CREDAI and NAREDCO welcomed the Reserve Bank of India's recent 25-basis-point repo rate reduction, noting that the move is likely to lower home loan interest rates and support housing demand. The rate cut, introduced after a six-month pause, comes alongside measures aimed at improving liquidity and supporting growth in a stable inflation environment. Industry leaders said the step would help strengthen market sentiment, ease borrowing costs, and encourage investment. While housing sales had surged between 2022 and 2024, volumes moderated this year due to a high base and price escalation.
Industry bodies CREDAI and NAREDCO have responded positively to the Reserve Bank of India's decision to reduce the repo rate by 25 basis points. The cut, introduced during the past week after a six-month gap, is expected to ease lending rates for homebuyers and support broader housing demand. The central bank paired the move with steps to improve liquidity at a time when the domestic environment remains stable and inflation is at a decadal low. Advertisement
CREDAI President Shekhar Patel said the rate cut is likely to strengthen market sentiment and reduce borrowing costs for both consumers and businesses. He noted that the decision reflects the RBI's intention to support India's economic growth, especially when liquidity constraints have eased and credit growth remains steady. Patel also pointed to the industry's expectation of a stronger close to the financial year with stable demand across all segments of housing.
NAREDCO President Parveen Jain called the reduction an important signal for the economy and the real estate sector. He said lower interest rates would make housing finance more affordable, encourage new investment, and benefit allied industries that depend on real estate activity. According to him, improved liquidity conditions could also create more employment opportunities within construction and related supply chains.
The real estate sector had seen strong housing sales from 2022 to 2024, supported mainly by pent-up demand following the slowdown during the COVID-19 years. The luxury segment in particular drove a large share of this growth. However, residential sales volumes softened during the first nine months of the current calendar year as a result of a higher base and faster appreciation in property prices since the pandemic.
Market analysts believe that India's strong economic performance in the first two quarters of the 2025-26 fiscal year, combined with potentially lower mortgage rates following the latest policy change, could help revive homebuying activity in the months ahead.
Source PTI
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