Kolkata, Jun 6 (PTI) The Reserve Bank of India’s decision to cut the repo rate by 50 basis points to 5.5 per cent, along with a 100 basis points reduction in the cash reserve ratio (CRR), is set to boost housing demand in Kolkata's residential property market by 5-10 per cent, particularly in the affordable segment, real estate developers said on Friday.

"The lower interest rate regime would make home loans cheaper, driving up demand by at least 5 to 10 per cent in the coming months," Sushil Mohta, CREDAI West Bengal President, told PTI.

“In FY2024-25, Kolkata saw the sale of around 17,389 residential units, marking a 16 per cent rise year-on-year,” he said.

The stock of unsold affordable homes in the city dropped to 12,783 units in March 2025 from 16,069 units a year ago, reflecting sustained buyer interest despite relatively stable prices.

“Kolkata is largely an affordable housing market, and the rate cut will make home ownership more accessible while easing borrowing costs for developers. The CRR cut will further improve liquidity for both homebuyers and builders,” Mohta who is also Chairman of the Merlin Group added.

Despite a moderate 10 per cent increase in residential prices over the past two years—lower than Bengaluru (29 per cent), NCR (20 per cent) and Mumbai (13.5 per cent)—Kolkata’s price points are expected to remain steady going forward, given limited profit margins in the segment.

Mahesh Agarwal, Managing Director of Purti Realty, echoed similar sentiments.

“The RBI’s policy decision will sharply reduce borrowing costs and make credit more affordable. We expect demand to rise across all segments—affordable, mid-income and luxury. Lower EMIs will improve access to homeownership and spur greater participation in the real estate market,” he said.

According to developers, the RBI’s move comes at a crucial time when buyer sentiment is gradually strengthening, and the city’s property market, while conservative in pricing, is poised for higher transaction volumes in the new financial year.

Industry players believe that the rate cut signals renewed confidence in the broader economy and is likely to have a ripple effect on construction activity, employment generation, and allied sectors in Kolkata.

Real estate's contribution to the state's GDP and employment is significant, which is why the state government had extended fiscal and policy incentives to boost sales during the COVID-19 pandemic. PTI BSM NN

Interest rate reduction makes home loans cheaper and is expected to boost housing demand in Kolkata. The Reserve Bank's reductions in the policy repo rate and cash reserve ratio are expected to lower borrowing costs and improve market liquidity, making home loans cheaper and enhancing credit availability. Developers anticipate this will boost residential demand in Kolkata-especially in the affordable housing segment-supporting higher transaction volumes and reinforcing construction and employment activity, while not necessarily altering price levels due to constrained profit margins.