Affordable housing segment, which constitutes Calcutta’s peripheral micro markets, is going to benefit the most from RBI’s decision to cut repo rate, industry participants said on Friday.

A total of 100 basis point (1 per cent) cut in home loan rates from February till date, if passed on by the banks entirely, could reduce monthly burden on the home buyer by ₹3,057 on a ₹50 lakh loan with 20-year tenure.

“Affordable and mid-segment housing will see the biggest demand uptick, as these segments are most sensitive to interest rate changes,” Sushil Mohta, chairman Merlin Group, and president of Credai, West Bengal, said.

Industry participants pointed out that projects coming up Barasat, Baruipur and beyond Joka and Dunlop bridge are the hotspots for affordable housing, with unit prices below ₹50-60 lakh. Within the Calcutta city proper, the prices are mostly upwards of ₹1 crore.

“There is huge demand for the affordable segment but supply is limited, due to high land prices in Calcutta,” Sidharth Pansari, director of Primarc and president of Credai Kolkata, said.

But even in the localities where affordable housing is still being built, demand has been less than robust, not just in Calcutta but across India. Affordable housing faced the sharpest pandemic fallout, with sales and new launches shrinking in the top 7 cities.

“Anarock data shows that affordable housing sales share plummeted from 38 per cent in 2019 to 18 per cent in 2024, while its supply share dropped from 40 per cent to 16 per cent in the same period,” Anuj Puri, chairman of Anarock, said in a note.

According to Samantak Das, chief economist and head of research at JLL, the RBI action will boost market confidence and start a positive chain reaction in the economy. “This unprecedented policy rate cut should propel growth in residential housing in Calcutta,” he noted.

The repo and CRR cut will also help developers in bringing down finance costs. “The easing of borrowing costs will help alleviate financial strain, facilitate funding for ongoing and upcoming projects,” Sanjay Jain, managing director of Siddha, said.

While euphoria over policy action is justified, much would depend on transmission by banks who would first look to protect net interest margin in a falling repo rate cycle.