Industry leaders hail RBI's rate cut as catalyst for further boosting housing demand and homebuyer sentiment

Times of Oman

07-06-2025

New Delhi: The Reserve Bank of India's Monetary Policy Committee (MPC) has taken a decisive step to revive economic momentum by slashing the repo rate by 50 basis points, bringing it down to 5.5%, while also reducing the Cash Reserve Ratio (CRR) by 100 bps. These moves, combined with a revised CPI inflation outlook of 3.7% and a projected real GDP growth of 6.5% for FY26, reflect a front-loaded approach to accelerate growth and consumer confidence.
Responding to the announcement, CREDAI-MCHI, the apex body of real estate developers in the Mumbai Metropolitan Region, Gera Developments and Star Housing Finance Limited welcomed the RBI's bold and growth-oriented stance, highlighting its strong potential to unlock housing demand, especially in the affordable and mid-income segments.
Mr. Domnic Romell, President, CREDAI-MCHI said:
"This dual action of reducing both the repo rate and CRR sends a clear signal--liquidity infusion and affordability are a priority. Lower interest rates on home loans will make homeownership more accessible to thousands of first-time buyers across MMR and beyond. This move can energize end-user sentiment, improve project viability, and bring housing within reach for many."
Mr. Dhaval Ajmera, Secretary, CREDAI-MCHI added:
"We urge banks and lending institutions to swiftly transmit the benefit of the rate cut to consumers. The current economic environment--low inflation, improved liquidity, and steady demand--creates a strong foundation for a real estate-led recovery. This is the ideal time for aspiring homebuyers to take the leap."
CREDAI-MCHI also emphasized that the CRR cut will support NBFCs and banks in extending more credit to developers, particularly those operating in emerging growth corridors of MMR such as Panvel, Dombivli, Vasai-Virar, and Kalyan, where affordable housing remains the driving force.
The organization reaffirmed its commitment to working collaboratively with stakeholders to ensure the benefits of this monetary easing are passed on efficiently and transparently, accelerating India's journey toward inclusive housing and sustainable urban growth.
Mr. Rohit Gera, Managing Director Gera Developments, highlighted:
"The RBI's decision today to cut the repo rate for the third time in a row comes as no surprise, given the strong macro indicators retail inflation easing to 3% levels, solid GDP momentum with a 6.5% growth target, and ample durable liquidity already pumped into the system. This cumulative 100 bps repo rate reduction in 2025 is now complemented by a sharp 100 bps cut in the CRR from 4% to 3% which alone injects significant liquidity and lowers banks' cost of funds. Together, these measures are designed to accelerate monetary policy transmission and bring down lending rates across the board. This reflects the central bank's aim to bolster domestic economic growth and shared prosperity amid global uncertainties. For the real estate sector, this move could be a catalyst: lower borrowing costs will translate into reduced EMIs and improved homebuyer sentiment. Hopefully, banks actively and rapidly pass on the cut to home buyers. The policy stance clearly aims to revive private investment and consumption."
Mr. Kalpesh Dave, Director & CEO, Star Housing Finance Limited mentioned:
"The RBI's decision to reduce the repo rate by 50 basis points is a welcome move. This should translate into lower EMIs for home loan borrowers. Disposable income should increase and thereby scope for increased spending. Concurrently, it lowers the borrowing costs for HFCs and NBFCs. We anticipate a thrust in retail credit off-take, particularly in home financing, as affordability improves. This is a positive step that should stimulate consumer spending and boost the housing sector. While celebrating this growth impetus, we acknowledge that vigilant inflation monitoring remains crucial going forward to sustain these benefits."