(MENAFN- IANS) Mumbai, Dec 5 (IANS) The Reserve Bank of India's decision to cut the repo rate by 25 basis points to 5.25 per cent is expected to give a strong push to housing demand, especially in the affordable and mid-income segments, as home loan EMIs are likely to come down in the coming weeks.

Announcing the monetary policy decision on Friday, RBI Governor Sanjay Malhotra said the MPC voted unanimously for the rate cut to support growth in the economy.

He said the sharp fall in inflation to 1.7 per cent and the strong 8.2 per cent GDP growth in the second quarter had created a“Goldilocks period” that gave the central bank room to ease rates.

Real estate developers and consultants welcomed the move, saying it would improve affordability and encourage fence-sitters to finally buy homes.

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa at CBRE, said the rate cut reflects the RBI's focus on boosting consumption in a low-inflation environment.

He said lower rates are likely to push banks to transmit earlier cuts more aggressively and support demand across real estate segments.

“For real estate, this is expected to boost the demand and strengthen investment sentiment across segments. For home loan borrowers, this might bring a tangible relief as floating-rate EMIs will ease,” he added.

Anuj Puri, Chairman of ANAROCK Group, said housing prices across the top seven cities have increased by about 10 per cent in 2025, affecting affordability in interest rate–sensitive segments.

He said the lower repo rate could encourage buyers who had delayed purchase decisions due to price hikes, adding that the real impact would depend on how quickly banks pass on the benefits.

He expects the momentum in the residential market to strengthen further in early 2026.

“Coming on the back of earlier easing cycles this year, this move further sweetens the value proposition for homebuyers, particularly in the affordable and mid-income segments which are highly sensitive to interest rate fluctuations,” Puri added.

JLL India also described the rate cut as a proactive, growth-focused step. Dr. Samantak Das, Chief Economist and Head of Research at JLL India, said the move leverages India's strong macroeconomic position and provides a direct boost to homebuyer affordability.

He said quick transmission is likely because a large share of home loans is linked to external benchmarks, which could offer faster EMI relief.

“For the residential sector, this is a direct boost to affordability which has been a growing concern amid rising property prices,” Das added.

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