Real Estate Shares Decline for Third Consecutive Day Amid Profit Booking
Real estate shares in India continue to witness profit booking, with companies like Godrej Properties and Oberoi Realty leading the losses. The sector faces volatility due to concerns over weak volume growth and falling home affordability.
Real EstateProfit BookingGodrej PropertiesOberoi RealtyNuvama Institutional EquitiesReal Estate MumbaiSep 24, 2025
The recent profit booking comes after a strong run in the sector, which saw real estate stocks rise for six out of seven sessions earlier this month. This optimism was fueled by rate cuts by the Federal Reserve and GST reforms. However, the market sentiment has shifted, leading to a pullback in share prices.
On September 24 at 1 pm, Godrej Properties and Oberoi Realty were trading 3% lower each, while Prestige Estates and DLF saw declines of 2.95% and 2.5%, respectively. According to a report by Nuvama Institutional Equities, the real estate sector is expected to face volatility in the near term due to several key concerns.
Nuvama highlighted that investor confidence has weakened, largely due to a lack of uniformity in the real estate market. This issue, not seen since the period between 2020-21 (April to March) and FY24, has led to a drop in sales volumes between June 2024 and May 2025. The firm noted 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 for 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 that 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.
These insights provide a comprehensive overview of the current state of the real estate sector in India, highlighting the key factors influencing market trends and investor sentiment.
Frequently Asked Questions
What is causing the decline in real estate shares?
The decline in real estate shares is primarily due to profit booking after a strong run earlier this month, coupled with concerns over weak volume growth and falling home affordability.
Which real estate companies are leading the losses?
Godrej Properties and Oberoi Realty are leading the losses, with both companies' shares falling by 3% each on September 24.
What are the main concerns affecting the real estate sector?
The main concerns affecting the real estate sector include weak volume growth, decreasing home affordability, and a shortage of mid-income homes.
Which cities have the strongest real estate markets?
The National Capital Region (NCR) and Pune have the strongest real estate markets, with inventory levels of just 10 and 13 months, respectively.
What is Nuvama Institutional Equities' outlook on the real estate sector?
Nuvama Institutional Equities expects the real estate sector to face volatility in the near term, with real estate stocks trading within a limited range. Falling mortgage rates might soften the downward pressure, but concerns around valuations and volume growth will likely restrict upward movement.
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