According to PropEquity, housing sales in India’s top 9 cities, has been witnessing a YoY decline, falling from 3% growth YoY in Q1 2024 to (-)20% in Q1 2025.
The PropEquity data also suggests that supply of homes in affordable and mid-income category (Rs 1 crore and below) fell by 36% in last two years (2022-24) in top 9 cities. In contrast, the supply of homes priced Rs 1 crore and above have risen by 48% in the last two years.
The move will boost liquidity and stimulate credit growth, as India’s GDP growth rose to a four-quarter high of 7.4% in Q4 FY25, making India the world’s fastest-growing large economy.
With retail inflation in comfortable territory, this deep cut in interest rates and liquidity measures will boost consumption and further accelerate India’s growth momentum. Both these measures will ensure that the benefits of the interest rate cut reach the customers quickly, thereby cushioning the impact of rising housing prices on new homebuyers and also boosting the affordable housing sector, as even a small reduction in home loan rates influences buyers’ decisions.
According to PropEquity, housing sales have declined in the top 9 cities of India. It increased by 3 percent in the first quarter of 2024, which has reached a decline of 20 percent in the first quarter of 2025.
According to data from PropEquity, the supply of homes in the affordable and mid-income category (Rs 1 crore and less) has fallen by 36 per cent in the top 9 cities during the last two years (2022-24). In contrast, the supply of homes priced at Rs 1 crore and above has increased by 48 per cent in the last two years.
Given the global uncertainties, pick-up in growth and fall in inflation, the successive cuts in repo rate by 100 basis points and CRR by 100 basis points are welcome moves by the RBI, which will boost consumption and economic growth.
However, with further cuts expected in FY26, fixed deposit interest rates (which are now below 7.5%) could fall further, which could lead to a loss of interest from savers and large investors (HNIs/UHNIs) who may be tempted to move to higher-return options such as Alternative Investment Funds (AIFs), which are considered safe, diversified and offer better returns.
Vijay Harsh Jha, founder and CEO of property brokerage firm VS Realtors :
India’s economy is poised for robust growth in the financial year 2025-26 (FY26). Three consecutive 100 basis point cuts in the repo rate (now 5.5%) and a 100 basis point reduction in the CRR reflect RBI’s vision to sustain growth momentum by making credit accessible and increasing liquidity amid declining inflation.
Although India’s housing sector has shown some weakness in the last few quarters, the decision to cut repo rates and reduce CRR will help maintain the momentum in the sector.
