Reaction on the the RBI`s 50 bps cut in the repo rate by Mr Vimal Nadar, National Director & Head, Research, Colliers India
Below the Reaction on the the RBI`s 50 bps cut in the repo rate by Mr Vimal Nadar, National Director & Head, Research, Colliers India
The RBI has reduced the repo rate further by a strong 50 bps - bringing it down to 5.5%, the lowest in almost three years. The third consecutive reduction in benchmark lending rate coupled with shifting to neutral stance reaffirms the growth-supportive monetary policy aided by softening of inflation levels. Despite external volatilities and evolving trade scenarios, the Central Bank projects the domestic economy to grow at 6.5% in Fiscal 2025-26. For the real estate sector, this move is a strong tailwind: it lowers borrowing costs for buyers & developers, boosts homebuyer confidence, and enhances affordability, especially in the affordable and mid-income housing segments. This could lead to improved buyer sentiment, an increase in residential property enquiries and conversions, and a pickup in sales volumes across key urban markets. Over the medium term, the reduction in the cost of capital is also expected to enhance investor confidence, potentially boosting activity in both residential and commercial real estate segments.
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