RBI's 50-bps repo cut to boost mid-income, affordable housing demand
Reserve Bank of India
's decision to cut the repo rate by 50 basis points to 5.5% is expected to help improve
housing affordability
and prop up demand for residential properties across the country, especially in the mid-income and
affordable housing
segments, experts said.
This is the third consecutive rate cut by the central bank so far in 2025 taking it to a cumulative 100 basis points. The rate cut comes amid signs of slowing momentum in housing sales in some markets, as sustained price increases begin to weigh on buyer sentiment.
'The rate cut is expected to bring down home loan interest rates, improving affordability and widening access to homeownership. This could provide a meaningful push for first-time buyers and households looking to upgrade, especially in price-sensitive urban and suburban markets. We expect this move to translate into increased enquiries and faster decision-making in the coming months,' said Deepak Goradia, CMD, Dosti Realty.
Play Video
Pause
Skip Backward
Skip Forward
Unmute
Current Time
0:00
/
Duration
0:00
Loaded
:
0%
0:00
Stream Type
LIVE
Seek to live, currently behind live
LIVE
Remaining Time
-
0:00
1x
Playback Rate
Chapters
Chapters
Descriptions
descriptions off
, selected
Captions
captions settings
, opens captions settings dialog
captions off
, selected
Audio Track
default
, selected
Picture-in-Picture
Fullscreen
This is a modal window.
Beginning of dialog window. Escape will cancel and close the window.
Text
Color
White
Black
Red
Green
Blue
Yellow
Magenta
Cyan
Opacity
Opaque
Semi-Transparent
Text Background
Color
Black
White
Red
Green
Blue
Yellow
Magenta
Cyan
Opacity
Opaque
Semi-Transparent
Transparent
Caption Area Background
Color
Black
White
Red
Green
Blue
Yellow
Magenta
Cyan
Opacity
Transparent
Semi-Transparent
Opaque
Font Size
50%
75%
100%
125%
150%
175%
200%
300%
400%
Text Edge Style
None
Raised
Depressed
Uniform
Drop shadow
Font Family
Proportional Sans-Serif
Monospace Sans-Serif
Proportional Serif
Monospace Serif
Casual
Script
Small Caps
Reset
restore all settings to the default values
Done
Close Modal Dialog
End of dialog window.
With home loan rates likely to ease following this rate reduction, realty developers are optimistic about a fresh wave of end-user activity.
'For the real estate sector, this rate reduction is set to bolster credit lending, accelerate buying velocity, and enhance development momentum. Lower mortgage rates make home ownership more attainable, driving greater demand. Additionally, this move could spur refinancing and strengthen investment in branded properties known for their attractive returns, particularly among Grade A developers,' said Niranjan Hiranandani, Chairman, Hiranandani Group.
Lower borrowing costs could also unlock fence-sitter demand in tier II and III cities, where salaried buyers are highly rate-sensitive. The low-cost and affordable housing segment--a key pillar of the government's objective of Housing for All--is expected to benefit the most as loan instalments become more manageable.
The March quarter performance reflected continued stability in India's residential sector, with primary sales reaching 88,274 units, a 2% on-year increase, according to Knight Frank India. While overall sales remained steady, performance varied across markets, with the low-income and affordable segments lagging.
Commercial real estate may also see indirect benefits. Reduced funding costs are expected to improve project viability for office and retail developments, especially in under-construction assets that rely on institutional debt.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
27 minutes ago
- Business Standard
Banks must release funds without legal docs for survivor accounts: RBI
RBI says banks must release funds without legal documents in cases with survivorship clause or nominees; sets Rs 15 lakh threshold for claims without legal heir proof BS Reporter Mumbai The Reserve Bank of India (RBI) has directed banks not to insist on the production of legal documents where an account was opened with a survivorship clause and has nominees or survivors. In such cases, banks are only required to obtain a claim form, the death certificate, and an officially valid document of the nominee or survivor. 'Lenders shall adopt a simplified procedure for the settlement of claims in deposit accounts where a deceased depositor had not made any nomination or in cases of joint accounts without a nominee or survivorship clause, keeping in view the imperative need to avoid inconvenience and undue hardship to the claimant or legal heir. For settlement of such claims, a bank, based on its risk management systems, shall fix a threshold limit, subject to a minimum of ₹15 lakh,' the RBI said. However, in cases where the claim amount exceeds the threshold, the bank will require a succession certificate or legal heir certificate. Further, banks shall obtain an appropriate agreement or authorisation from the nominees, survivors, or legal heirs regarding the treatment of pipeline flows in the name of the deceased account holder to avoid hardship. Additionally, banks must include a clause in the account opening form stating that, in the event of the death of the depositor, premature termination of term deposits will be allowed without any penal charges, even if the deposit is within the lock-in period.
Time of India
an hour ago
- Time of India
RBI survey: Merchandise imports to grow twice more than exports in FY26; check details
India's merchandise imports are set to grow at more than double the pace of exports in the current financial year, according to the Reserve Bank of India 's latest economic outlook. The central bank released the Survey of Professional Forecasters on Macroeconomic Indicators (95th Round) on Wednesday. According to the apex bank's findings, 'Merchandise exports and imports are projected to grow by 1.2% and 2.5%, respectively, during 2025-26.' Looking ahead to 2026-27, merchandise exports are projected to grow by 4.9%, while imports are expected to climb by 6.0%. This widening gap in trade could weigh on India's external balance, ANI cited the report. The current account deficit (CAD) is projected at 0.8% of GDP at current market prices for 2025-26, rising slightly to 0.9% in 2026-27. On the broader economy, the survey expects India's real Gross Domestic Product (GDP) to grow by 6.4% in 2025-26, slightly lower than the RBI's official forecast of 6.5%. In FY27, the figure is expected to rise to 6.7%. The panelists foresee GDP growth ranging between 6.0% to 7.0% in 2025-26, and between 6.1% to 7.7% in 2026-27. The highest probability has been assigned to GDP growth in the 6.0% – 6.9% range for 2025-26 and 6.5% – 6.9% range for 2026-27. On the expenditure front, the real private final consumption expenditure (PFCE) is expected to rise by 6.5% in 2025-26 and 6.9% in 2026-27. Meanwhile, real gross fixed capital formation (GFCF) is projected to grow by 6.8% and 7.2% over the two years, respectively. Coming to inflation, the annual headline Consumer Price Index (CPI) based rate is estimated at 3.1% for 2025-26, increasing to 4.4% in 2026-27. The survey further showed that in the second quarter of FY26, CPI inflation, not including food and beverages, pan, tobacco, intoxicants and fuel and light, will remain at 4.4%. Furthermore, in the following quarters, it will fall in the range of 4.3%-4.5% in the following quarters. Stay informed with the latest business news, updates on bank holidays and public holidays .
Economic Times
an hour ago
- Economic Times
Euro hits record high against rupee, Europe trips get costlier
Agencies The euro climbed to an all-time high of ₹102.3763 against the Indian rupee, according to the Reserve Bank of India's reference rate published on August 7. This marks the steepest valuation of the euro in rupee terms, pushing up travel costs for Indian tourists planning trips to Europe. The strengthening of the euro comes amid global market volatility, capital outflows, and weakening demand for the rupee. The euro has appreciated by 15% against the Indian rupee between January 1 and August 7, 2025, significantly raising the rupee cost of euro-denominated expenses. What this means for your Europe travel budget Day-to-day travel is now costlier Tourists will now need over ₹102 for every euro spent on food, local transport, attractions, and shopping. Tourists will now need over ₹102 for every euro spent on food, local transport, attractions, and shopping. Visa and insurance fees are up With euro-denominated charges, the actual amount paid in rupees for Schengen visas and travel insurance policies has increased. With euro-denominated charges, the actual amount paid in rupees for Schengen visas and travel insurance policies has increased. Forex card and currency exchange cost more Loading €1,000 on a prepaid travel card now means spending ₹1,02,376 or more, excluding bank charges and mark-ups. Loading €1,000 on a prepaid travel card now means spending ₹1,02,376 or more, excluding bank charges and mark-ups. Old package quotes may no longer hold Fixed-quote tours and group packages issued earlier may be revised, with either reduced inclusions or additional charges. Ways to manage costs Action Impact Lock in forex rates now If the rupee weakens further, early forex purchases may prove cost-effective. Book in INR when available Many booking platforms allow transactions in rupees, shielding you from further euro volatility. Choose offbeat or non-euro destinations Countries like Hungary or Poland, which don't use the euro, may offer better value. Travel during shoulder season Lower airfare and hotel rates in months like March and October can offset currency losses. With the euro officially at ₹102.3763, the cost of a Europe vacation is now significantly higher for Indian travellers. Adjusting plans early could help limit the impact of further currency fluctuations. (Join our ETNRI WhatsApp channel for all the latest updates) Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. As RBI retains GDP forecast, 4 factors that will test the strength of Indian economy India's last cement IPO did not work. Can JSW Cement break that curse? Is Shadowfax closing in on its closest rival? Can Coforge's ambition to lead the IT Industry become a reality? Berlin to Bharuch: The Borosil journey after the China hit in Europe Stock Radar: Syngene International showing signs of momentum after falling 26% from highs; what should investors do? Two Trades for Today: A life insurance major for a 4.85% upmove, a mid-cap diesel engine maker for almost 7% rise Multibagger or IBC - Part 18: This auto ancillary started with wheels. It now also powers wind & war Auto stocks: Yes, headwinds in the short term, but will structural change become tailwinds and prove analysts wrong?
