Consumer Housing Sentiment Weakens; RBI Rate Cut Offers Timely Relief to Buyers: Magicbricks Report

The latest report from Magicbricks sheds light on the current state of the Indian housing market, revealing a weakening of homebuyer sentiment across metros. The Magicbricks Housing Sentiment Index, which tracks consumer confidence in the real estate sector, has dropped from 156 in July 2024 to 138 in March 2025, indicating that buyers are becoming more cautious.

This moderation in housing sentiment comes at a time when property prices in many cities have continued to rise, outpacing demand. However, the recent 25 basis point repo rate cut by the Reserve Bank of India (RBI)—which reduces lending rates from 6.25% to 6%—may offer a much-needed boost to homebuyers. The reduced rates are expected to lower borrowing costs, offering relief to potential homebuyers who may have been deterred by high interest rates and rising property prices.

For instance, a homebuyer with an ₹80 lakh loan over 20 years could save up to ₹1,250 per month on EMIs, making homeownership slightly more affordable. This rate cut is seen as a timely intervention, given the ongoing price increases in key markets and shifting dynamics in housing supply.

Regional Housing Sentiment Trends

The report also highlights significant regional variations in housing sentiment. Gurugram, with a sharp 33-point decline in its housing sentiment index, emerged as the city with the lowest buyer confidence. The steep rise in residential prices in Gurugram, which saw a 31.4% increase YoY, is likely contributing to this shift. As of Q1 2025, the average price of residential properties in Gurugram reached INR 15,607 per square foot, making it one of the most expensive markets in India.

This price escalation has had a direct impact on buyer confidence, not only in Gurugram but also in other major cities like Mumbai, Delhi, and Bengaluru. For example, Mumbai and Bengaluru, with index scores of 148, and Delhi with 138, all reported weaker sentiment among prospective homebuyers. The combination of higher prices and cautious market sentiment in these cities is making it harder for many to enter the market.

On the other hand, cities such as Ahmedabad, Kolkata, Hyderabad, and Chennai have recorded higher levels of buyer confidence. Ahmedabad led with a score of 157, followed by Kolkata at 149, and Hyderabad and Chennai, both scoring 146. These cities are currently seen as more affordable markets compared to the larger metros, with average residential prices of INR 6,179 per square foot in Ahmedabad, INR 8,106 per square foot in Kolkata, and INR 8,770 per square foot in Hyderabad.

These cities have also witnessed steady price appreciation, which, combined with relatively affordable rates, continues to attract homebuyers. For example, while the average price in Ahmedabad remains lower than in other metros, the city’s consistent growth in property values has contributed to its higher confidence score.

Market Caution Amid Rising Prices

Despite the rate cut, the housing market is still facing significant challenges. According to the Magicbricks survey, 58% of respondents now plan to delay their home purchase due to current market conditions, up from 43% in 2024. This hesitation can be attributed to several factors, including rising property prices and a shift in the type of housing supply available. The market has seen a growing trend toward the development of premium and luxury properties, leaving a large segment of potential buyers, particularly those in the affordable housing bracket, with fewer options.

The increase in premium segment housing is also influencing the overall affordability of homes, as more developers focus on the high-end market where profit margins are higher. This shift is creating a mismatch between supply and the needs of end users, leading to further caution among buyers who may find it more difficult to find a home that fits their budget.

A Mixed Outlook for Homebuyers

While the recent RBI rate cut provides relief, the overall outlook for the housing market remains cautious. Rising property prices and the shift toward premium developments are causing hesitation among potential buyers, particularly in cities like Gurugram, Mumbai, and Bengaluru. However, cities like Ahmedabad, Kolkata, and Hyderabad are presenting more attractive options for buyers seeking relatively affordable opportunities with steady price appreciation.

The housing market's trajectory over the next few months will likely depend on how the economy adjusts to the new interest rates and how developers respond to the shifting demands of buyers. The market is currently in a state of flux, and prospective homebuyers will need to navigate these changes carefully in the months ahead.