RBI Rate Cut Offers Relief, but Housing Sentiment Declines: Magicbricks

The Reserve Bank of India (RBI) has reduced the repo rate by 25 basis points, lowering lending rates from 6.25% to 6%, a move expected to ease borrowing costs and boost homebuyer confidence amid rising housing prices.

According to Magicbricks' Housing Sentiment Index, buyer sentiment has dropped from 156 in July 2024 to 138 in March 2025, reflecting growing caution. With the new lending rates, homebuyers could save up to ₹1,250 per month on ₹80 lakh home loans over 20 years, making homeownership more affordable.

Despite a 0.6% QoQ growth in residential demand, prices have risen 2.8% QoQ, widening the gap between demand and affordability. Gurugram saw the sharpest decline in buyer sentiment, dropping 33 points, in line with a 31.4% YoY price increase, reaching ₹15,607 per sq. ft. Mumbai, Delhi, and Bengaluru also recorded weaker buyer confidence.

On the other hand, Ahmedabad (157), Kolkata (149), Hyderabad, and Chennai (146) showed higher buyer confidence, offering relatively affordable investment options with steady price appreciation.

Market hesitation is rising, with 58% of respondents planning to delay home purchases, up from 43% in 2024. A key reason is the shift in new housing supply from affordable to premium and luxury segments, impacting affordability for many end users.