Another RBI Rate Cut To Spark Affordable Real Estate Momentum: Experts

New Delhi: As the Reserve Bank of India (RBI) prepares for its financial coverage committee (MPC) assembly this week, business professionals mentioned on Tuesday that the transmission of charge cuts into decrease borrowing prices is important to maintain residential actual property call for — specifically within the inexpensive housing section, which is touchy to rate of interest actions. 

Given the existing benign inflation setting and the GDP enlargement of 6.5 in step with cent recorded in FY2025, the Reserve Bank is prone to continue with a 25-bps repo charge minimize this Friday (June 6).

“The case for a rate cut is further supported by the revival in the liquidity conditions to a surplus of Rs 3.6 lakh crore, which enhances the effectiveness of monetary transmission. Additionally, the softening of G-sec yields reflects bond market confidence in the RBI’s inflation and liquidity management and strengthens the rationale for easing rates,” mentioned Shishir Baijal, Chairman and Managing Director, Knight Frank India.

With the predicted charge minimize, the cumulative aid within the coverage charge on this cycle can be 75 bps.

However, the point of interest should now shift to the tempo and breadth of transmission.

“While some commercial banks have begun to lower their MCLR and base rates, the adjustments have been modest. With liquidity conditions stabilising, there is now greater scope for commercial banks to accelerate the pass-through of policy easing to borrowers. This will be key to spurring consumer demand and private investment, ultimately supporting economic growth,” Baijal famous.

The Central Bank is projected to chop the repo charge through some other 50 foundation issues (bps) this fiscal (FY26), after the 50 bps minimize till April this 12 months. Bank lending charges have begun easing, which will have to fortify home call for, in line with a modern Crisil word.

Experts mentioned that with EMIs constituting an important percentage of per thirty days source of revenue in inexpensive class, even a modest aid in lending charges can affect purchasing selections, offering the essential momentum to fortify this price-sensitive call for section.