The RBI’s 50 bps rate cut marks a strong and proactive stance aimed at lifting the low and mid-value housing segments. Over the last few years, the strong housing market momentum was increasingly concentrating in the premium end, even as there were signals of weakening demand in the lower segments. With this cumulative 100 bps cut in the repo rate, we expect a rekindling of demand in these underserved categories, as affordability will witness a meaningful improvement for such homebuyers. This move is especially timely, as it comes amid rising concerns about the uneven recovery within the housing sector. A broader recovery across income segments is essential not only to strengthen the residential real estate cycle but also to deepen the socio-economic impact of housing. We hope that the developer community, particularly those focused on mass housing, renews its focus in a big way to give longer legs to this housing market upcycle, which is now in its 5th year.Liquidity conditions, meanwhile, continue to remain favourable. As of the latest data, the liquidity in the banking system is at Rs 3.7 trn. The RBI’s calibrated liquidity operations through variable rate reverse repos (VRRRs) and open market operations (OMOs) in the last few months have ensured that the system remains sufficiently liquid while avoiding excessive volatility. Furthermore, upcoming gradual reduction of cash reserve ratio (CRR) by 100 bps will bring in consistent liquidity surplus in the system. With liquidity conditions stabilizing, there is now greater scope for commercial banks to accelerate the pass-through of policy easing to borrowers. This would create an enabling environment for lending institutions extend affordable credit to first-time home buyers and middle-income households. Further, with stable inflation and relatively contained fiscal risks, the macroeconomic backdrop allows room for policy continuity. As interest rates decline and disposable incomes gradually rise, we expect a broader revival in consumption, of which housing is a cornerstone. A coordinated push from policymakers, lenders, and developers can help ensure that the benefits of this rate cycle reach the households that need it the most.The view is presented by Shishir Baijal, Chairman and Managing Director, Knight Frank India