Real Estate Stocks Flat After RBI's 50 bps Rate Cut: What's the Impact?
After a strong rally last week, real estate stocks cooled off on Monday following the Reserve Bank of India's (RBI) larger-than-expected 50 basis point repo rate cut. The move is expected to boost housing demand, but investors booked profits, leading to a marginal decline in the Nifty Realty index.
Real EstateRbiRepo RateNifty RealtyHousing DemandReal Estate NewsJun 09, 2025
The Nifty Realty index had surged nearly 4.7 per cent on June 6 to close at 1,039.60 after RBI Governor Sanjay Malhotra-led Monetary Policy Committee announced a 50 bps rate cut, double the consensus estimate of 25 bps. The unexpected easing had lifted sentiment sharply on Friday, pushing realty stocks to new highs.
However, on Monday, the index saw mild pressure as short-term traders opted to cash in on the recent gains. Stocks like Prestige Estates and Brigade Enterprises slipped over 1 per cent, while Oberoi Realty dropped around 0.8 per cent. DLF, Godrej Properties, and Macrotech Developers (Lodha) also saw minor losses.
While the 50 bps repo rate cut takes the benchmark rate to 5.5 per cent and is seen as a tailwind for housing demand, analysts note that much of the optimism was already priced in last week. Moreover, global market uncertainty and a cautious tone among institutional investors ahead of inflation data have capped aggressive buying.
JM Financial, in its latest real estate sector note, said, 'The cumulative 100 bps cut since February 2025 significantly improves housing affordability. For a Rs 1 crore home loan, tenure reduces by nearly 3 years at the same EMI, or eligibility increases by Rs 15 lakh, a game changer for mid-income and affordable housing.’
Amid the overall subdued tone, Anant Raj shares gained over 2 per cent, while Sobha, Raymond, and Phoenix Mills managed marginal gains. Experts believe select quality names in residential and commercial realty may continue to attract investor interest on every dip.
While Monday saw some cooling off, the medium-term outlook for real estate remains bullish, say analysts, especially if the current rate cycle sustains.
Frequently Asked Questions
What is the Nifty Realty index?
The Nifty Realty index is a benchmark index that tracks the performance of the top 15 real estate companies listed on the National Stock Exchange (NSE) in India.
What is the impact of the 50 bps repo rate cut on real estate?
The 50 bps repo rate cut is expected to boost housing demand by making home loans more affordable, reducing the tenure of loans, or increasing the loan eligibility amount.
Why did real estate stocks cool off on Monday?
Real estate stocks cooled off on Monday as investors booked profits after the sharp rally last week, and due to global market uncertainty and cautious institutional investors.
What is the role of the RBI in the real estate sector?
The Reserve Bank of India (RBI) influences the real estate sector through its monetary policy decisions, such as repo rate cuts, which can affect lending rates and, consequently, housing demand.
What is the medium-term outlook for the real estate sector?
The medium-term outlook for the real estate sector remains bullish, especially if the current rate cut cycle sustains, as it is expected to improve housing affordability and attract more investors.
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