Your home loan EMI is about to become cheaper
What's the story
The Reserve Bank of India's (RBI) recent move to cut the repo rate by 25 basis points, from 6.5% to 6.25%, is likely to give a boost to the real estate sector.
Industry experts feel this will lower borrowing costs for homebuyers and developers, possibly increasing property investments and housing demand due to reduced home loan EMIs.
Economic impact
Rate cut to stimulate consumption
The rate cut is expected to not just improve liquidity but also boost consumption and purchasing power, thereby driving economic growth.
Cushman & Wakefield's Chief Executive, India, SEA & APAC Tenant Representation, Anshul Jain, called the RBI's decision a well-timed and much-needed move.
He added that "this move is going to help revive growth in consumption," especially for the interest rate-sensitive housing sector.
Borrower relief
Rate cut to make loans more affordable
Sahil Lakshmanan, Chief Business Officer at CarePal Money, said the rate cut would give much-needed relief to borrowers by making home, auto, as well as personal loans affordable.
He added, "lower EMIs would boost consumer spending," while businesses could benefit from lower borrowing costs.
The move is expected to potentially drive investment and job creation in the economy.
Sector growth
Rising demand in real estate sector
Pradeep Aggarwal, the Founder and Chairman of Signature Global (India) Ltd, said the repo rate cut could make home loans cheaper and boost demand—particularly in mid and premium segments.
He said, "this could accelerate capital deployment in infrastructure and urban development," further propelling real estate growth.
Manju Yagnik, the Vice Chairperson of Nahar Group and Senior VP, NAREDCO, Maharashtra, reiterated that the move is expected to drive demand for housing.