Real Estate Stocks Plunge Amid US-Iran Tensions and Rising Oil Prices

Shares of real estate companies declined on Tuesday, with Lodha Developers falling more than 5 percent and DLF dropping over 3 percent. The Nifty Realty index slipped about 3 percent amid broader market weakness, rising macro uncertainty linked to Middle East tensions, and rising concerns over inflation and foreign investments squeeze.

Lodha Developers stock was trading at Rs 916.3, down 5.2 percent, while Signatureglobal declined 4.4 percent to Rs 918.5. DLF shares fell 3.5 percent to Rs 569.8 after the Supreme Court directed the Central Bureau of Investigation to probe alleged irregularities in the Primus DLF Garden City project following complaints from homebuyers about missed completion deadlines.

Other realty stocks also traded lower. Brigade Enterprises shares slipped about 3.2 percent to Rs 657, Oberoi Realty declined 2.4 percent to Rs 1,455, and Godrej Properties fell around 2.2 percent to Rs 1,695. Phoenix Mills dropped about 1.8 percent to Rs 1,619, while Prestige Estates Projects and Sobha were down around 1-2 percent during the session.

Inflation may hurt household spending power in India. The selling in real estate stocks came as global crude oil prices and energy markets turned volatile following the escalating conflict in the Middle East, raising concerns about inflation and household spending in oil-importing economies such as India.

Analysts said higher fuel prices can indirectly affect housing demand by increasing overall living costs and squeezing disposable incomes. Rising crude prices may also push up construction costs, as cement, steel, and transportation are energy-intensive inputs, although developers typically pass on such costs gradually.

Middle East tensions may hit inflows from Gulf countries. Market participants also flagged potential near-term pressure on luxury housing demand from non-resident Indians in the Gulf region, which accounts for a significant portion of high-end property purchases in major cities such as Mumbai, Delhi-NCR, Bengaluru, and Hyderabad. Industry estimates suggest NRIs contribute roughly 18-22 percent of primary residential sales across India’s top eight cities, with a large share coming from Gulf countries.

Despite these concerns, experts say any impact on housing demand is likely to be gradual and linked more to affordability trends rather than an immediate disruption in sales.

The weakness in real estate stocks also came alongside a broader market decline. At around 2:45 pm, the Sensex was down about 793 points or 1 percent at 79,446, while the Nifty declined 289 points or 1.2 percent to 24,577. Market volatility remained elevated, with the India VIX rising more than 23 percent during the session.