In a bold move to boost economic momentum, the Reserve Bank of India (RBI) on June 6, 2025, announced a 50 basis points cut in the repo rate, bringing it down to 5.5%. Alongside, the central bank also reduced the Cash Reserve Ratio (CRR) by 100 basis points, prompting a surge in real estate and housing finance stocks during early trading hours.
The realty sector responded positively to the announcement, with major listed developers seeing notable gains. Sunteck Realty rose by 3%, Oberoi Realty gained 2.22%, and DLF climbed 1.68%. Shares of Sobha, Prestige Estates, and Godrej Properties also registered increases of up to 3%.
The BSE Realty Index jumped 2.5%, touching the 7,800 mark in morning trade, reflecting renewed investor confidence in the sector.
Housing finance companies also benefited from the sentiment shift, with LIC Housing Finance and PNB Housing Finance recording gains of up to 2.14%. The expectation that banks will transmit the rate cuts to end consumers has raised hopes of more affordable home loans and stronger housing demand.
According to real estate consultancy Anarock, the reduced rates could significantly ease EMI burdens for homebuyers. Analysts expect the move to especially boost demand in the affordable and mid-income housing segments, which have witnessed a dip in their market share from 38% in 2019 to 18% in 2024.
The RBI’s change in policy stance from ‘accommodative’ to ‘neutral’ indicates a focus on balancing inflation control with growth stimulation. Experts believe the dual rate cut — repo and CRR — will enhance liquidity in the banking ecosystem, encouraging more lending activity.
Overall, the rate cuts are being seen as a timely intervention to support not just the real estate sector, but the broader economy as well.
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