The Reserve Bank of India (RBI) recently decided to reduce its policy repo rate by 25 basis points to 5.25%, a move that industry experts say could trigger a significant uptick in housing demand across the country. This rate cut is widely expected to lower home loan interest rates, making borrowing cheaper for prospective homebuyers and stimulating the real estate market.

Home loans are a major financial commitment for most individuals, and any reduction in interest rates can ease the burden of Equated Monthly Installments (EMIs). According to voices from the real estate sector, the RBI’s decision will likely prompt banks and lending institutions to pass on the benefits of the rate cut to customers. This could translate to lower home loan rates and more affordable EMIs, thereby increasing the purchasing power of buyers.

Ashish Agarwal, founder and managing director of PropertyPistol, pointed out that a 25 basis points cut can reduce EMIs notably on typical home loans. For instance, if you have a loan of around Rs 50 lakh, the decrease in interest rate could translate into hundreds or even thousands of rupees saved every month. This will not only make homes more affordable but will also encourage many fence-sitters who have been reluctant to enter the market to take the plunge.

Industry bodies also emphasized that the positive sentiment generated by the rate cut will have a ripple effect across the economy. Lower borrowing costs tend to boost credit growth and consumer confidence, two crucial factors that support sustained demand in the housing sector. With home prices previously impacted by higher interest rates, the reduction is expected to reinvigorate sales velocity, particularly in major metropolitan regions.

Markets like Mumbai Metropolitan Region (MMR), National Capital Region (NCR), and Pune, which have seen rising EMIs affecting affordability, are poised to benefit significantly from this move. Developers and homebuyers alike are welcoming the rate cut, viewing it as a potential catalyst for revitalizing investments and growth within the sector.

Moreover, the timing of the rate cut could not be more opportune. As 2025 draws to a close and the real estate market looks to gather momentum heading into 2026, cheaper home loans could be the nudge needed to convert more prospective buyers into actual buyers. The expectation is that this boost in demand will encourage developers to continue launching new projects, further supporting economic growth and job creation.

In conclusion, the RBI’s decision to lower the repo rate by 25 basis points is seen as a strategic move to ease liquidity in the economy and make credit more accessible. For homebuyers, this translates to potentially lower EMIs and greater affordability; for the real estate sector, it promises increased demand and revitalized market activity. As banks begin to reflect these changes in their home loan offerings, the coming months could witness a positive transformation in India’s housing market dynamics.