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The reduction in repo rate by 25 basis points by the Reserve Bank of India has given new hope to the real estate sector. Everyone from home buyers to developers is going to directly benefit from low interest rates. Experts believe that this decision can prove to give a boost to the housing market in the first quarter of 2026.
New Delhi. The repo rate cut of 25 basis points by the Reserve Bank of India (RBI) on December 5, 2025 has filled new energy in the real estate industry. The repo rate has come down from 5.50 percent to 5.25 percent, which represents a total reduction of 125 basis points in 2025. This year, the government has emphasized on policies like GST 2.0, further strengthening RERA, due to which the confidence of buyers in the real estate sector has continuously strengthened. This policy of softening of interest rates is sure to bring relief to the budget of home buyers. At the same time, this will prove to be a great support for developers in the present times.
Big relief for home buyers, EMI will reduce
People thinking of buying a house will directly benefit from this cut by RBI, because now home loans are going to become cheaper. Due to reduction in interest rates, EMI will reduce and with this, buying a house will become easier and more affordable than before. Due to rising interest rates in the last one year, many families had postponed their home-buying decision, but now this rate cut can become a big incentive for them. This environment is considered to be most favorable especially for those looking for mid-segment and affordable homes.
Costs will reduce for developers, launches will increase rapidly
The festive season is also around the corner, and this is traditionally the most active time for real estate sales. Market experts believe that the first quarter of 2026 will see a sharp improvement in new bookings and sales of residential projects. The softening of interest rates will also provide an opportunity to those buyers who were earlier unable to find a property in their budget. Overall, reduction in EMIs and easier financial planning are likely to bring new momentum to the housing market. Real estate developers have welcomed this decision of RBI wholeheartedly. He says that this will reduce the cost of construction finance, land acquisition and other project loans. This will have a direct impact on the total cost of the project, which will now be lower than before.
Developers’ response
Many major developers have given their reaction to this move. BPTP CEO Manik Malik called it a balanced and far-sighted policy and said that it will increase stability and financial flow in the market. Rahul Singla, director of Mapsco Group, said that low interest rates give confidence to buyers and this will reduce the decision making time rapidly. Jitendra Yadav, director of Roots Developers, said that cheap home loans will strengthen the demand and new launches will accelerate. Sudeep Bhatt of Whiteland Corporation said that the rate cut will make financing easier and the sale of unsold houses will happen more quickly. Rishabh Periwal of Pioneer Urban believes that this will help a lot in starting and completing the project on time. Developers expect the pace of new launches and project delivery to be stronger than before in 2026.
Positive environment, demand will increase from residential to commercial space.
The monetary policy stance of RBI is growth promoting. The market environment is currently very positive due to inflation being under control and interest rates falling. The demand for houses is continuously increasing in big metros as well as in emerging tier-2 and tier-3 cities. Due to low interest rates, investor interest is expected to increase not only in the residential sector but also in office space, retail complexes and other commercial projects. Changes in working style, growing startup ecosystem and rapidly expanding metro infrastructure are also driving this demand. Overall, RBI’s 25 bps cut could prove to be a major turning point in the real estate cycle of 2025–26. Buyer confidence is increasing, developers’ enthusiasm is returning and the market is moving towards a stable and fast-paced phase. This cut will not only have an impact today but may also prove to be decisive in the direction of real estate growth in the coming years.
