MUMBAI: Borrowing costs at India's two most rate-sensitive sectors - property and automobiles - are set to head South soon after the central bank Friday made its steepest rate cut since March 2020 and promised ample liquidity in the shape of the lowest cash reserve ratio (CRR) on record. The Nifty Realty index surged nearly 5%, even dwarfing gains for financial stocks, reflecting the likely impact of the big-bang policy moves on home purchases.Home, personal, and car loans tied to external benchmarks, such as the repo rate, will see an immediate downward reduction. However, loans tied to the marginal cost of funds-based lending rate (MCLR), like corporate exposures, will take longer to head lower.Policy action, Reserve Bank of India (RBI) Governor Sanjay Malhotra said, is geared toward boosting broader credit demand for which monetary support is a necessary condition , although not sufficient. We see this as an opportunity to step up credit deployment, especially towards productive sectors and retail demand, while continuing to support MSMEs, retail, agri, and other priority segments, said Ashok Chandra, MD & CEO of Punjab National Bank.On Friday, the RBI reduced the benchmark repo rate by 50 basis points to 5.5%, taking the total cut to 100 bps in the current rate easing cycle that began in February. Furthermore, the RBI also reduced the CRR or the funds lenders must park with the RBI, by a percentage point starting September, promising to add $30 billion of liquidity in phases and helping reduce borrowing costs.Before the cut, State Bank of India, the largest mortgage lender, was charging 8-8.65% interest on home loans.As per a Paisabazaar analysis, if the home loan rate falls to 7.5%, a loan of ?75 lakh with a tenure of 20 years would see EMI fall to ?60,419 a month. At 8% a borrower would pay ?62,733 as monthly interest payout.Hot PropertyStocks such as Godrej Properties, Oberoi Realty, DLF and Prestige surged between 5% and 6.75% on unusually large volumes, overshadowing gains at large financiers that are expectedly the biggest gainers from the policy moves Friday. The Nifty Automobile index climbed 1.5%, with truckmaker Ashok Leyland leading the list of gainers at 3.6%.The RBI's decision is also expected to help improve housing affordability and prop up demand for residential properties across the country, especially in the mid-income and affordable housing segments, experts said.With home loan rates likely to ease following this rate reduction, realty developers are optimistic about a fresh wave of end-user activity. The rate cut is expected to bring down home loan interest rates, improving affordability and widening access to homeownership. This could provide a meaningful push for first-time buyers and households looking to upgrade, especially in price-sensitive urban and suburban markets. We expect this move to translate into increased enquiries and faster decision-making in the coming months, said Deepak Goradia, chairman of Dosti Realty.Lower borrowing costs could also unlock fence-sitter demand in tier II and III cities, where salaried buyers are highly rate-sensitive.