More real estate leaders weigh in on the anticipated rate cut and its broader implications, as the Reserve Bank of India’s Monetary Policy Committee (MPC) prepares for its June 2025 meeting. While some view the prospect of a rate cut — possibly as deep as 50 basis points — as a timely catalyst to stimulate housing demand and reduce borrowing costs, others caution that rate cuts alone may not address deeper structural challenges such as financing constraints, urban affordability, and project liquidity. Their views reflect the complex interplay between monetary policy and real estate recovery dynamics.
Shrinivas Rao, FRICS, CEO, Vestian
“Reserve Bank of India (RBI) is expected to lower the repo rate by 25 basis points for the third consecutive time to boost consumption as inflation continues to remain below the 4% target range. It is also anticipated to maintain an ‘accommodative’ monetary policy stance to support growth amid global uncertainties triggered by US tariffs and geopolitical frictions.”
Rao further added, “This rate cut is expected to bring relief to both homebuyers and developers, as most commercial banks are likely to follow suit and reduce interest rates. While homebuyers will be able to secure home loans at lower rates, developers will benefit from low borrowing costs, potentially boosting affordability and investments in the real estate sector.
LC Mittal, Director, Motia Builders Group:
“Expect demand for refinancing to skyrocket post-policy! A third cut in succession would widen its gap with existing loans versus new rates, which would make balance transfers very sensible, especially for loans above 8%. Analysts and experts on the topic are suggesting that borrowers with 50%/more of the tenure left, compare.. lenders lending rate, before refinance becomes normal; if borrowing ₹50 lakh loan, you can save over ₹7 lakh in tenure. But, some non-bank lenders may delay rate cuts for their riskier lending segment, due to their legacy liquidity issues. Compare processing fees against savings on paying off existing loan, your lender’s profile. Target banks half-solutions that offer automatic repo-linking and have no friction to renegotiate monthly.”
Aman Gupta, Director of RPS Group
“Metro markets might disregard a 50 bps cut as being ‘too little, too late’. Given that EMI burden is already consuming 55% of income in major cities, any rate reductions will be too late to offset pricing stagnation. Developers have already pushed rates up by another 3–5%, as the flagging interest was creeping back towards affordability anyway. Investor yields are likely to worsen again, as lower rates will make buying not renting more appealing—yields are now below 2.6%. The real game-changer? Potentially more meaningful sites like Jewar or Dholera, where stagnant entry prices combined with good infrastructure links, will amplify the impact of financing perks—in and around transit stations, a 15–20% increase in sales could be achieved.”
Vimal Nadar, National Director and Head of Research, Colliers India: “We expect the RBI to continue its growth-supportive stance and further rationalize the repo rate. While inflation being in control provides the elbowroom for continuation of an accommodative policy; impact of external trade volatilities and atypical monsoon patterns are likely to have a bearing on future growth prospects. A third consecutive reduction in benchmark lending rates can spur homebuyers’ sentiment and resultantly improve housing demand particularly in affordable and middle-income segments. For developers too, the rate cut could aid in gradual inventory clearance and offer financial relief by lowering of borrowing costs.”
