Gurugram Real Estate Market Struggles with Affordability, Hyderabad Reaches Peak: Nuvama
Nuvama's latest report highlights the challenges in the Gurugram real estate market, including affordability issues, while suggesting that Hyderabad may have passed its peak. Despite these challenges, the brokerage remains optimistic about Bengaluru and Chennai's housing markets.
Real EstateGurugramHyderabadNuvamaBrokerageReal EstateSep 18, 2025
Mumbai Metropolitan Region (MMR) is currently at a mid-cycle stage, while Pune has exhibited signs of 'growth fatigue.' However, Gurugram faces a significant 'affordability challenge,' which could impact its real estate market in the near future.
Nuvama Institutional Equities has expressed concerns about the real estate sector's performance, noting that stocks could remain range-bound if cyclicals continue to be out of favor. The brokerage prefers Prestige Estates and Brigade Enterprises, naming them as top picks in the sector.
According to Nuvama, the sentiment around the real estate sector will remain cautious in the near term. This is due to several challenges, including weak volume growth, reduced affordability, lower hiring due to tariff-related concerns, and a slow economic recovery. The brokerage anticipates that volatility will continue, with stocks likely to remain range-bound. While falling mortgage rates may protect the downside, the upside is capped by valuation and volume growth concerns.
Nuvama maintains a 'Buy' rating for Prestige Estates and Brigade Enterprises, with a target price of Rs 2,009 apiece for Prestige Estates, implying an upside potential of more than 21 percent from the stock's previous closing price. For Brigade Enterprises, the brokerage has set a target price of Rs 1,437 per share, indicating an upside potential of nearly 51 percent from the stock’s previous closing price.
The brokerage also notes that with price increases likely to moderate, investor-led demand may decline. This could further impact the real estate market, particularly in cities like Gurugram where affordability is already a significant issue.
In conclusion, while the real estate market in India faces several challenges, Nuvama remains optimistic about the potential for growth in certain regions. Investors and stakeholders should remain cautious and consider these factors when making investment decisions in the real estate sector.
Frequently Asked Questions
What are the main challenges facing the Gurugram real estate market?
The main challenge facing the Gurugram real estate market is an 'affordability challenge.' This means that properties are becoming less affordable for potential buyers, which could impact the overall market dynamics.
Why does Nuvama believe Hyderabad's real estate market may have passed its peak?
Nuvama believes that Hyderabad's real estate market has likely passed its peak due to a combination of factors, including reduced growth potential and increased competition in the market.
Which cities does Nuvama still consider as having growth potential in the real estate sector?
Nuvama still considers Bengaluru and Chennai as having growth potential in the real estate sector. These cities are expected to continue to see positive developments in their housing markets.
What is Nuvama's stance on real estate stocks in the current market?
Nuvama believes that real estate stocks could remain range-bound if cyclicals continue to be out of favor. The brokerage prefers Prestige Estates and Brigade Enterprises as its top picks in the sector.
What are the target prices set by Nuvama for Prestige Estates and Brigade Enterprises?
Nuvama has set a target price of Rs 2,009 apiece for Prestige Estates and Rs 1,437 apiece for Brigade Enterprises, indicating significant upside potential for both stocks.
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