Image used for representative purpose. (File Photo | Express)
HYDERABAD: The Reserve Bank of India’s jumbo 50-basis-point cut in the policy repo rate to 5.5%, along with a 100-basis-point reduction in the Cash Reserve Ratio, has landed in Hyderabad at a time when developers have been struggling to balance brisk demand with rising construction costs.
Announced during the RBI’s Monetary Policy Committee meeting in Mumbai on Friday, the move is expected to reduce EMIs once banks pass on the entire half‑percentage‑point relief. Mortgage advisers estimate that a `1 crore, 20-year loan could become approximately `3,000 cheaper per month, enhancing the purchasing power of both first-time buyers and those eyeing upgrades.
Sentiment on the ground is positive. CREDAI Hyderabad president V Rajasekhar Reddy described the cut as a welcome move that could nudge fence‑sitters. He noted that Hyderabad’s real estate market, driven by end users, remains fundamentally strong.
With the city entering 2025 carrying under six quarters of unsold inventory—despite a 21% rise in primary sales last year—Rajasekhar Reddy Allipuram, founder & CEO of PropGo Infra and Realty, believes the deeper-than-expected cut could reduce this overhang by prompting quicker purchases over the next two to three quarters.
“Yet the pace of relief will hinge on how quickly lenders re‑price home loans and whether input‑cost inflation stays in check,” he cautioned. Any lag on either front, he warned, could blunt what is otherwise the strongest monetary tailwind the city has felt since the pandemic slowdown.
CREDAI Hyderabad’s V Rajasekhar Reddy echoed the optimism. “The unsold inventory reflects increased launches to meet anticipated demand, not stagnation,” he noted, adding that Hyderabad’s affordability and robust infrastructure pipeline position it to clear inventory faster than other metros, and to drive new project launches, provided liquidity improves and policy support persists. He also stressed the importance of timely rate transmission by banks. “Any delay dilutes the intent of such monetary interventions,” he said.
PropGo Infra’s Reddy expects public sector banks, which typically respond more quickly, to begin passing on the rate cut within the coming weeks. He warned that delays could dampen buyer interest, especially in price-sensitive segments like affordable and mid-income housing.
With prices still more affordable than in other metros, Hyderabad is well-positioned for a significant rise in real estate activity—particularly in high-demand areas like Kokapet, Neopolis, the Financial District, and Tellapur.
For now, developers, brokers, and buyers across the city appear to be reading the RBI’s decision as a green light: cheaper mortgages, easier project finance, and a shift to a “neutral” policy stance are setting the stage for the next phase of the city’s housing cycle.
Local realtors say that many potential buyers are already revisiting affordability calculations. Several agents in Gachibowli and Narsingi say households are now willing to stretch budgets by 5–7%, confident that EMIs will remain manageable.
Developers are hopeful that the `2.5 lakh crore liquidity released through the CRR cut will soon translate into cheaper working capital, which is essential as labour costs rise and material prices remain volatile, putting pressure on project viability. Reflecting this sentiment, the Nifty Realty index surged 4.47% on Friday—its sharpest single-day gain in months.
