India’s residential real estate sector may be headed for a notable upswing following the Reserve Bank of India’s recent 50 basis points cut in the repo rate, taking the total rate reduction in 2025 to 100 basis points. Market analysts and developers anticipate that the move could significantly revive housing sales, particularly in the ₹2–5 crore price segment, which has emerged as a key growth driver in the post-pandemic housing landscape.
The rate cut, announced at a time of stabilizing inflation and moderate economic growth, is expected to bring home loan interest rates below the 8% mark. This could restore affordability for homebuyers and unlock demand across major urban centres. Industry experts suggest that reduced EMIs and long-term savings on borrowing costs are likely to enhance buyer confidence and accelerate decision-making.
According to data from ANAROCK, residential units priced between ₹1.5 crore and ₹3.5 crore accounted for nearly 25% of overall housing sales across India’s top seven cities in Q1 2025—up from 18% in the same period two years ago. Homes in the ₹2–5 crore range are reportedly witnessing the fastest traction, driven by end-users and aspirational buyers seeking upgrades.
With the affordability equation improving, a ₹2.5 crore home loan could now offer savings of ₹35–40 lakh over a 20-year tenure due to lower interest rates, potentially reducing EMIs by ₹10,000–₹12,000. This may enhance financial comfort and accelerate the sales cycle.
Speaking on market dynamics, Signature Global’s Co-Founder & Managing Director Ravi Aggarwal said that improved affordability, combined with growing demand for premium, well-connected residential offerings, could lead to a notable surge in sales in the coming quarters.
Key micro-markets expected to benefit from this trend include the Dwarka Expressway, Southern Peripheral Road and South of Gurugram in Gurugram, Thane and Powai in Mumbai, North Bengaluru, and select hubs in Pune and Hyderabad. These regions have witnessed a rise in new launches in the ₹2–5 crore segment, often featuring larger floor areas, sustainable designs, and contemporary amenities aimed at the urban upper middle-income group.
With the affordability equation improving, a ₹2.5 crore home loan could now offer savings of ₹35–40 lakh over a 20-year tenure due to lower interest rates, potentially reducing EMIs by ₹10,000–₹12,000. This may enhance financial comfort and accelerate the sales cycle.
As per Knight Frank, approximately 1.25 lakh residential units were sold across India’s top seven cities in Q1 2025, marking a 9% year-on-year increase. New project launches rose 7% during the same period, with nearly 30% of new inventory priced above ₹2 crore. CRIF High Mark data further indicated a 12% rise in home loan inquiries during April–May 2025, suggesting growing consumer interest ahead of potential rate transmission by banks.
The real estate sector’s contribution to India’s GDP, currently estimated at 7.3% in 2023, is projected to exceed 10% by 2030. The expected increase will be driven by urban housing demand, infrastructure investments, and the country’s demographic dividend.
Industry watchers believe that the RBI’s monetary easing could act as a major catalyst for a housing-led recovery in 2025. With banks likely to transmit the lower rates soon and developers offering ready-to-move and near-completion inventory, the coming quarters could see sustained momentum in housing sales—particularly in the premium mid-income category.
