RBI’s repo rate cut likely to boost affordable home sale in Kolkata
Times of India | 8 February 2025
12 Kolkata: Developers in Kolkata are eyeing a major boost in affordable home sales following the repo rate cut by the Reserve Bank of India, which will see a reduction in equated monthly instalments on housing loans or a reduction in the borrowing term. The first rate cut in five years has already prompted State Bank of India to reduce home loan rates. Other banks are expected to follow suit.
Following the Union Budget, in which Union finance minister Nirmala Sitharaman announced zero income tax for those with an annual income of up to Rs 12 lakh, developers said it will further spur affordable segment home purchases.
"Kolkata, being a price-sensitive market, the Union Budget and the monetary policy announced on Friday will have a significant positive impact on the residential market in the city. This year could witness a new growth trajectory in terms of housing sales in Kolkata," said real estate consultancy firm JLL India's chief economist and head (research) Samantak Das.
According to analysts, home loan customers could save as much as Rs 4.2 lakh on a Rs 50 lakh loan for a term of 30 years. This can be done either through a reduction in EMI amount or reducing the number of EMIs while keeping the payout constant.
"We anticipate a further rate cut will provide stronger impetus to overall demand, accelerating housing sales, particularly in the mid-income and affordable segments. Together, these measures signal a robust framework for sustainable growth, fostering confidence among homebuyers, developers, and investors alike," said Confederation of Real Estate Developers Association of India (West Bengal) president Sushil Mohta.
Siddharth Pansari, president of CREDAI Bengal, said the construction costs would reduce following the rate cut. "We expect a similar rate cut within the next six months. If that happens, it will be a big boost to the sector," he said.
"This rate cut, the first one since May 2020, is likely to support economic growth by boosting consumption and investment. Increased liquidity in the banking system will help address market constraints, benefiting sectors like infrastructure and housing," said real estate consultancy firm Knight Frank chairman and MD Shishir Baijal.
Check out the latest news about Delhi Elections 2025, including key constituencies such as Chandni Chowk, New Delhi, Kalkaji, Jangpura, Patparganj, Rohini, Rajinder Nagar, Greater Kailash, Okhla, and Dwarka.