Real Estate Shares Decline for Third Consecutive Day Amid Profit Booking
Real estate shares experienced a third day of declines on September 24, with Godrej Properties and Oberoi Realty leading the losses. Concerns over weak volume growth, falling home affordability, and a shortage of mid-income houses are contributing to the market volatility.
Real EstateProfit BookingNifty RealtyGodrej PropertiesOberoi RealtyReal Estate NewsSep 24, 2025
The profit booking in the shares comes after they rose for six out of seven sessions earlier this month on optimism over rate cuts by the Federal Reserve and GST reforms. On September 24 at 1 pm, Godrej Properties and Oberoi Realty were trading 3% lower each, followed by Prestige Estates and DLF, which fell 2.95% and 2.5%, respectively.
Meanwhile, according to a report by Informist, Nuvama Institutional Equities noted that the real estate sector is expected to face volatility in the near future due to concerns over sluggish volume growth, decreasing housing affordability, and a shortage of mid-income homes. Nuvama highlighted that investor confidence has weakened, largely because of a lack of uniformity in the real estate market, an issue not seen since the period between 2020-21 (April to March) and FY24.
Sales volumes dropped between June 2024 and May 2025. The firm explained that rising home prices have reduced affordability, with premium and luxury segments dominating sales, resulting in a narrow housing cycle. They expect price increases to slow down, which could reduce investor-driven demand. The brokerage report also pointed out that the National Capital Region (NCR) and Pune remain the strongest markets, with inventory levels of just 10 and 13 months, respectively. Other cities have higher inventory levels, ranging from 17 to 21 months, except Hyderabad, which has 26 months of inventory.
Nuvama anticipates that real estate stocks will continue trading within a limited range and that volatility will persist. Falling mortgage rates might soften the downward pressure, but concerns around valuations and volume growth will likely restrict upward movement. In a separate note last week, Nuvama suggested that the market consistency seen from FY21 to FY24 may no longer continue. The brokerage believes Bengaluru and Chennai’s housing markets still have room for growth, while Hyderabad may have already peaked.
Regarding the Mumbai Metropolitan Region (MMR), the report describes it as being in a mid-cycle phase. Pune, meanwhile, appears to be experiencing “growth fatigue,” while Gurugram is dealing with challenges related to housing affordability.
Frequently Asked Questions
What is causing the decline in real estate shares?
The decline in real estate shares is largely due to profit booking after a recent rise, concerns over weak volume growth, falling home affordability, and a shortage of mid-income houses.
Which companies are leading the losses?
Godrej Properties and Oberoi Realty are leading the losses, with both companies' shares falling by up to 3%.
What are the main concerns in the real estate market?
The main concerns in the real estate market include sluggish volume growth, decreasing housing affordability, and a shortage of mid-income homes.
Which cities are performing well in the real estate market?
NCR and Pune are the strongest markets with inventory levels of just 10 and 13 months, respectively. Other cities have higher inventory levels, ranging from 17 to 21 months, except Hyderabad, which has 26 months of inventory.
What is the outlook for real estate stocks?
Nuvama anticipates that real estate stocks will continue trading within a limited range and that volatility will persist. Falling mortgage rates might soften the downward pressure, but concerns around valuations and volume growth will likely restrict upward movement.
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