RBI’s Repo Rate Cut to Boost Housing Sales, Say CREDAI and NAREDCO

Lower Interest Rates Expected to Drive Affordable and Mid-Income Housing Demand​

New Delhi, April 9 — India's top real estate bodies, CREDAI and NAREDCO, have welcomed the Reserve Bank of India’s (RBI) decision to cut the repo rate by 25 basis points, anticipating a surge in housing sales, particularly in the affordable and mid-income segments. The move is expected to bring down home loan interest rates, making property purchases more attractive for prospective buyers.

The two associations, which collectively represent over 16,000 developers, believe the rate cut is a timely intervention aimed at revitalizing housing demand amid a slowdown in the sector.

CREDAI: Boost to Consumer Sentiment and Borrowing Power​

Boman Irani, President of CREDAI National, emphasized the significance of the rate cut against the backdrop of global economic uncertainties, including rising tariffs and geopolitical tensions.

“This move reflects a continued shift toward a pro-growth stance amid easing inflation and a stabilizing macroeconomic outlook,” said Irani.

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He added that the cut would uplift consumer sentiment and improve the borrowing capacity of homebuyers.

“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,” he noted.

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Irani also highlighted the RBI’s continued policy easing as a commitment to growth while maintaining macroeconomic stability.

NAREDCO: Catalyst for Sales, Liquidity, and New Projects​

G Hari Babu, National President of NAREDCO, echoed similar sentiments, stating that the reduction in the repo rate will positively impact the real estate sector across the board.

“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,” said Babu.

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He pointed out that the improved market conditions could motivate developers to launch new housing projects, especially in the affordable segment.

“With the reduction in borrowing costs, more aspiring homeowners may enter the market, which will help bridge the demand-supply gap,” he added.

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Babu also noted that the commercial real estate segment stands to benefit, as cheaper financing could spur business expansion and investments in office and retail spaces.

Recent Housing Market Trends​

The RBI's decision comes at a crucial time when housing sales have seen a notable decline. According to PropEquity, housing sales fell 23% year-on-year to approximately 1.06 lakh units during January to March 2025 across nine major cities. Another report by Anarock recorded a 28% drop in sales across seven cities during the same period, amounting to 93,280 units.

The rate cut is seen as a strategic move to reverse this downward trend and restore momentum in the real estate market.