Kolkata, Dec. 5 -- In the wake of the Reserve Bank of India's (RBI) decision to cut the repo rate by 25 basis points to 5.25 per cent, real estate builders in Bengal said that the move is expected to provide a strong boost to India's residential real estate market, particularly the affordable and mid-income housing segment in Kolkata.
Developers said the reduction in borrowing costs comes at a crucial time, as home prices across the top seven cities, including Kolkata, saw double-digit growth in 2025, putting pressure on budget-sensitive buyers.
Sushil Mohta, president of CREDAI West Bengal and chairman of the Merlin Group, said the rate cut will reduce the cost of funds for developers while lowering home loan rates for buyers.
"Ninety per cent of Kolkata's market still remains in the affordable category, though it is gradually shifting towards the mid-segment.
This rate cut will motivate fence-sitters who had deferred purchase decisions. If banks pass on the benefit quickly, early 2026 could see strong growth, especially after the slowdown during the Bengali Poush month," he said. The impact is expected to be felt across both demand and supply. Lower EMIs are likely to encourage first-time buyers and middle-income households, who are most sensitive to interest rate changes, he opined.
Calling the move "timely and welcome", Saket Mohta, managing director of Merlin Group, said it will not only improve sentiment but also speed up project execution. "The EMI reduction will push residential sales in Kolkata, particularly in the affordable and mid-income segments. Even the premium segment, which has been expanding, will gain from improved buyer confidence," he added.
Developers believe the rate cut sets the stage for a firmer revival in 2026.
Published by HT Digital Content Services with permission from Millennium Post.