Repo Rate Goes Down by 25 Basis Points: What It Means for Indian Real Estate

On 9th April 2025, the Reserve Bank of India (RBI) announced a 25-basis-point reduction in the repo rate during its Monetary Policy Committee (MPC) meeting, bringing the rate down to 6.00%.

This is the second consecutive cut this year. And experts feel that this is a signal of the central bank’s shift to an accommodative position to help boost the country’s economic growth. Global uncertainties play an undeniable role in this shift.

And of course, if you are in the market to buy property, repo rates affect your financial planning and budgets. Let us take a quick look at what is ahead for Indian real estate!

What is the Repo Rate?

A quick explanation of what the repo rate is and why we are paying attention to it.

The repo rate is the interest rate at which the RBI lends money to commercial banks for their short-term funding needs, typically against government securities. 

When the bank lowers this rate, the RBI makes borrowing cheaper for banks. In turn, this reduces interest rates on bank loans for businesses and end consumers. This fiscal mechanism helps boost economic activity by encouraging spending and investment.

For more information, head over to our blog on repo rates here:

Expected Impact on Businesses and Economy

The reduction in the repo rate is expected to ease borrowing costs across various sectors.

Businesses will reap the benefit of cheaper loans, enabling them to invest in expansion and infrastructure projects. For consumers, the reduced interest rates on personal and vehicle loans could boost spending, further driving demand in the economy. 

However, global developments such as U.S. tariffs on Indian exports are a concern, tamping down on the previous optimism about the country’s growth prospects. Taking these factors into account, India’s GDP growth forecast for FY26 has been revised downward from 6.7% to 6.5%. 

And this is why the RBI has changed its stance to a more accommodative position, looking at mitigating risks and supporting domestic economic resilience.

Indian Real Estate Sector: A Boost for Homebuyers

For homebuyers and developers, the repo rate cut is good news indeed.

Lower borrowing costs mean reduced EMIs on home loans. This has a couple of advantages – it makes property buying more affordable, plus you can stretch your budget to a larger home if you wish to.

Indian real estate has shown a marked preference for mid-range and luxury housing segments. And buyers looking at properties in these segments will be happy when lower interest rates spur their confidence in the market.

Further, lower rates could infuse more liquidity into the real estate sector, encouraging investment activity and supporting the growing housing demand. 

For instance, data shows that residential properties in Gurgaon—a thriving real estate hub—are attracting increased interest from investors seeking long-term returns.

Forecast for India’s Economy

In the coming months, India’s economy is expected to have a mixed outing.

On one hand, domestic consumption and investment are likely to improve due to the monetary easing. On the other hand, external pressures such as trade tensions may hamper growth. Industry analysts anticipate the country’s GDP growth to stabilize around 6.5%, with inflation remaining under control at approximately 3.6%.

Our Take on This?

Looking to invest in real estate? Team Save Max can help you find your dream property in Gurgaon or other prime locations across India. Contact us today to explore opportunities tailored to your needs!

Save Max Real Estate Brokerage has partnered with leading banks including SBI, HDFC, Bajaj Finserv, and ICICI to offer seamless home loan solutions. Contact us today and let our dedicated team connect you with these partners, ensuring you receive the best possible solutions and lower interest rates.