Leading banks including HDFC Bank, Canara Bank, and Bank of Baroda have swiftly responded by reducing their marginal cost of funds-based lending rates (MCLRs), passing on the benefits to borrowers. The rate cuts are expected to lower home loan EMIs, bringing relief to both prospective and existing borrowers under floating-rate loan schemes.

The State Bank of India (SBI), the country’s largest lender, also moved to ease borrowing costs, slashing its lending rates by 50 basis points. Effective June 15, SBI’s repo-linked lending rate (RLLR) now stands at 7.75%, while its external benchmark-based lending rate (EBLR) has dropped from 8.65% to 8.15%. However, other major public sector lenders such as Punjab National Bank (PNB) have opted to keep their lending rates unchanged for now, reflecting a more cautious approach.

The overall reduction in borrowing costs is being welcomed by industry leaders and analysts, who believe the move will rekindle buyer interest, especially in the affordable and mid-income housing segments.

Industry Welcomes Move

Prashant Sharma, President of NAREDCO Maharashtra, praised the development, saying, “The interest rate correction is a timely booster for the housing sector. Reduced EMIs will not only revive fence-sitters but also give impetus to end-user-driven demand. We expect this to translate into improved sales velocity, particularly in Tier-I cities like Mumbai and Pune.”

Echoing this sentiment, Nishant Deshmukh, Founder and Managing Partner of Sugee Group, said, “The reduction in lending rates offers much-needed and immediate relief to homebuyers, particularly those dependent on home loans to realise their dream of homeownership. Lower EMIs ease financial pressure and make property ownership more accessible. This positive shift will help restore buyer confidence and support long-term growth in the real estate sector.”

Shraddha Kedia-Agarwal, Director at Transcon Developers, added, “The revised rates will allow homebuyers — especially first-time buyers — to re-evaluate their budgets and invest in homes with better amenities and lifestyle offerings. For developers, this could catalyse fresh enquiries and faster conversions.”

Outlook for the Sector

With lending rates now trending downward and broader macroeconomic indicators showing signs of stability, the real estate sector appears poised for a more broad-based recovery. Market experts believe this shift could be the start of a sustained revival, balancing affordability with aspirational housing needs.

The RBI’s move, coupled with proactive rate revisions by banks, is expected to stimulate demand, boost market sentiment, and strengthen the foundation for long-term growth in India’s housing sector through 2025 and beyond.

Also Read: RBI RR Hike to Impact home sales

The post Home Loan EMIs to Fall as Banks Cut Lending Rates; Real Estate Sector Set for a Boost appeared first on Square Feat India.

Inflation Eases, Expectations Rise

With inflation cooling to 3.16% in April 2025 — well below the RBI’s 4% target — and GDP growth stabilizing, economists and real estate leaders say the central bank has room to continue its accommodative stance.

“The RBI is expected to provide major relief to homebuyers by reducing the repo rate by 25 bps,” said Pradeep Aggarwal, Chairman of Signature Global. “This will encourage first-time homebuyers and investors to re-enter the market.”

Positive Sentiment in Real Estate

The real estate sector, especially the affordable and mid-income segments, is highly sensitive to changes in interest rates. Lower EMIs can make homeownership viable for millions who were priced out due to rising property prices and borrowing costs.

“With each rate cut, affordability improves significantly,” noted Piyush Bothra, CFO of Square Yards. “Even a 1% interest rate drop can increase a homebuyer’s purchasing power by nearly 10%.”

According to Anurag Goel of Goel Ganga Developments, “A 50 bps cut would reduce EMIs by about ₹1,200 on a ₹50 lakh home loan over 20 years — a meaningful difference for salaried homebuyers.”

Real Estate Sector at a Crossroads

Despite long-term potential, the real estate market is grappling with challenges — a 28% drop in residential sales in India’s top 7 cities (Q1 2025 vs Q1 2024), tight lending conditions, and high construction costs.

“Lower borrowing costs could stimulate stalled demand in affordable housing,” said Anuj Puri, Chairman of ANAROCK. “But transmission is key — banks must ensure end borrowers actually benefit.”

Affordable housing, once dominant, now makes up only 18% of total residential sales (down from 38% in 2019), according to ANAROCK. Yet a 19% drop in unsold affordable units signals there’s still strong demand from genuine end-users — if financing becomes easier.

What Homebuyers Should Watch For

• Rate Transmission: Not all banks pass rate cuts equally. Repo-linked loans benefit faster; MCLR-linked loans may take longer.
• Refinancing Opportunity: If cumulative rate cuts hit 75–100 bps, borrowers with older loans could save ₹6–7 lakh on a ₹50 lakh loan by refinancing.
• Tenure vs EMI: Banks may prefer shortening loan tenures instead of reducing EMIs. Homebuyers should negotiate for better terms.

“Now is a good time for homebuyers to explore options, compare rates, and check reset clauses,” said LC Mittal of Motia Group. “If you’re planning to buy or refinance, this policy cycle could be your moment.”

Bottom Line for Homebuyers

With inflation under control and macroeconomic indicators stable, the stage is set for a potential repo rate cut in the June MPC meeting. If banks swiftly transmit this to home loan rates, homebuyers could see lower EMIs, better loan eligibility, and enhanced affordability — all of which can be game-changers in today’s high-priced housing market.

Also Read: RBI repo rate hike

The post Homebuyers May Get EMI Relief Soon as Experts Predict RBI Repo Rate Cut in June MPC Meet appeared first on Square Feat India.

The Current Sentiment Score dropped to 54 in Q1 2025 from 59 in Q4 2024. Similarly, the Future Sentiment Scoreeased to 56, reflecting a subtle but clear shift toward caution due to global economic volatility, regional tensions, and consumption softening. Despite this dip, both scores remain above 50 — indicating continued, albeit restrained, optimism.

Residential Market Sees Cooling Demand

The residential segment, particularly in the mid- and lower-ticket categories, is seeing signs of slowing demand:

• Only 22% of stakeholders expect residential sales to increase, a sharp decline from 73% in Q1 2024.
• 93% believe that prices will either remain stable or rise, although the share expecting actual price increases has dropped to 50%, down from 82% a year ago.
• New launches are also expected to slow, with only 28% of stakeholders anticipating growth in supply.

This reflects a shift toward pricing stability and recalibration of supply strategies, particularly in response to affordability concerns in the mass housing segment.

Office Sector Emerges as a Bright Spot

In contrast, the office segment continues to perform strongly:

• 82% of respondents expect office leasing volumes to increase or remain steady.
• 91% foresee stable or rising rental values, signaling strong occupier confidence.
• Although only 24% expect an increase in new office supply, high demand absorption is keeping the segment resilient.

Key demand drivers include Global Capability Centres (GCCs), IT services, and flex space operators, particularly in metro markets like Bengaluru, Hyderabad, and Pune.

Developers & Financial Institutions: A Cautious Stance

• The Developer Future Sentiment Score declined to 53, as developers adopt a more demand-led approach and focus on high-ticket projects.
• The Non-Developer Sentiment Score — which includes banks, financial institutions, and private equity funds — also fell slightly to 57, indicating a wait-and-watch approach on capital deployment.

Both groups remain selectively optimistic, especially about premium residential and commercial real estate, while being conservative about mass housing and speculative launches.

Macroeconomic Sentiment Dips Amid Global Headwinds

Economic expectations have softened:

• Only 55% of stakeholders believe the economic momentum will improve or stay the same — significantly down from 91% in Q1 2024.
• Global trade tensions and regional instability are contributing to uncertainty.

However, recent RBI repo rate cuts in February and April 2025 have improved liquidity and borrowing sentiment, with 79% of respondents expecting funding availability to improve or remain stable.

Industry Leaders Weigh In

Shishir Baijal, Chairman and Managing Director of Knight Frank India, commented:

“Q1 2025 marks a phase of strategic recalibration for the sector. Premium residential and commercial segments continue to display strength, underlining the industry’s long-term resilience.”

Hari Babu, President of NAREDCO, added:

“This marginal dip in sentiment is not a sign of decline, but of maturity. The industry is moving forward cautiously but confidently, adapting to shifting market dynamics.”

Conclusion

The Q1 2025 Sentiment Index highlights a sector at a crossroads — cautiously optimistic but highly strategic. While residential demand in the affordable and mid-income segments moderates, premium housing and commercial office spaces continue to drive the industry forward. With liquidity improving and developers adapting quickly, Indian real estate remains on stable ground despite external challenges.

Also Read: MahaRERA Becomes First in India to Cross 50,000 Housing Project Registrations

The post Q1 2025 Sentiment Index: Housing Slows, Office Market Holds Strong appeared first on Square Feat India.

A Long-Awaited Move

Dr. Niranjan Hiranandani, Chairman of NAREDCO, welcomed the decision, stating, “This long-awaited and strategic move signals resilience in the market. With inflation under control and economic growth on track, lower interest rates will nudge homebuyers towards ownership, enhancing sales velocity.”

Domnic Romell, President of CREDAI-MCHI, emphasized the combined impact of fiscal policies, saying, “The RBI’s decision, along with the Budget’s pro-middle-class measures like higher income tax exemptions and enhanced home loan interest deductions, will encourage homeownership and boost demand, especially in urban centers like the Mumbai Metropolitan Region (MMR).”

Positive Impact on Homebuyers and Developers

Anuj Puri, Chairman of ANAROCK Group, noted that the rate cut aligns well with the recent housing market trends. “With housing prices rising by 13-30% across top cities in the last year, reduced home loan rates will provide a timely breather for buyers. Many first-time homebuyers who were hesitant may now take the plunge.”

Dinesh Yadav, MD of Fine Acers, highlighted the broader economic impact: “This move enhances liquidity, promotes borrowing, and supports consumer demand. It will stimulate residential and commercial activity, benefitting allied industries like construction, cement, and steel.”

Vishal Raheja, Founder & MD of InvestoXpert.com, echoed similar sentiments, stating, “Lower borrowing costs will boost homebuyer sentiment, increasing affordability and driving residential sales. Combined with tax relief, this will revive demand in the housing sector.”

A Boost for the Economy

Amit Bhagat, CEO & MD of ASK Property Fund, stressed the importance of the move for affordable housing. “Declining affordability due to high prices and interest rates had impacted housing sales. This rate cut, along with Budget initiatives like SWAMIH Fund 2, will help sustain demand and drive sales growth.”

Sunil Sisodiya, Founder of Geetanjali Homestate, highlighted the macroeconomic impact: “With inflation stable and GDP growth projected at 6.7%, this policy shift will increase liquidity, making real estate a more attractive investment.”

Cautious Optimism

While the real estate sector welcomes the rate cut, experts caution that its full impact depends on banks passing the benefits to consumers. “The cut will have a significant bearing on homebuyer sentiment, but rising property prices and inflation could limit its effectiveness,” noted Vimal Nadar, Head of Research at Colliers India.

Shrinivas Rao, CEO of Vestian, pointed out potential challenges, saying, “This move aims to boost liquidity, but could also put pressure on the rupee in international markets, affecting foreign investments.”

Piyush Bothra, CFO of Square Yards, summed up the overall sentiment: “Lower borrowing costs, stable inflation, and economic growth create strong tailwinds for real estate. ‘Acchhe din’ for the sector are set to continue.”

Conclusion

The RBI’s first repo rate cut in five years is seen as a major step toward improving housing affordability, boosting demand, and strengthening the real estate sector. As banks begin passing on the benefits, both homebuyers and developers are expected to gain, ensuring sustained momentum in the property market.

Also Read: stamp duty discount for homebuyers

The post RBI Cuts Repo Rate by 25bps: A Boon for Homebuyers and the Real Estate Sector appeared first on Square Feat India.