Real Estate Stocks Slip: What's Causing the Decline and What's Next for the Housing Market?
Real estate stocks took a hit on Wednesday, with the Nifty Realty index falling 1.6%. Here’s what’s driving the decline and the outlook for the Indian housing market.
Real EstateStocksHousing MarketNifty RealtyProfit BookingReal Estate NewsOct 08, 2025
The Nifty Realty index, too, slipped 1.6 per cent on the NSE today, trading as the top sectoral loser. Among individual stocks, Anant Raj share price dropped 4.7 per cent in the intraday trade and was quoting 4.5 per cent down at 12:15 PM.
Around the same time, Oberoi Realty shares were down 2.24 per cent, Brigade Enterprises 2 per cent, Signature Global shares 1.9 per cent, Godrej Properties 1.7 per cent, and DLF share price 1.2 per cent.
Share prices of Phoenix Mills, Prestige Estate Projects, and Lodha, meanwhile, were down in the range of 0.6 per cent and 1.16 per cent. By comparison, the Nifty50 index traded 0.28 per cent lower.
On Thursday, most real estate stocks witnessed a sharp swing on the upside. Anant Raj share price, for instance, rallied 4.34 per cent on Tuesday, followed by shares of Brigade Enterprises (up 3.64 per cent), Lodha Developers (2.68 per cent), and The Phoenix Mills (1.09 per cent).
Shares of Oberoi Realty, Godrej Properties, and DLF rose in the range of 0.25 per cent to 0.88 per cent. The Nifty Realty index was up 1.08 per cent on Tuesday.
In just four trading sessions in October, the Nifty Realty index has climbed 3 per cent on the NSE.
Why are real estate stocks falling today?
Apart from profit booking, a possible factor denting investor sentiment could be a decline in capital inflows in the real estate sector during the first nine months of calendar year 2025 (9M2025). According to a recent report by Colliers India, capital flows into India’s real estate sector declined by 9 per cent year-on-year (Y-o-Y) to $4.3 billion during the period as global headwinds and external volatilities hit investment sentiment.
The decline was largely on account of a deceleration in foreign investments in India. As per the report, foreign investments in the domestic real estate sector fell 36 per cent Y-o-Y to $2.1 billion in 9M2025, highlighting global investors’ cautious outlook towards India.
That said, domestic investors tried to cushion some of the impact by pumping in $2.2 billion in the sector, a growth of 52 per cent Y-o-Y.
India real estate sector outlook
According to analysts, the housing demand in India’s real estate sector should hold its ground in key locations in 2025, supported by record launches and rising supply. For the financial year 2025-26 (FY26), the market should see a likely balance, favoring credible developers, prime projects, and healthy absorption, with robust sales barring major global disruptions.
Notably, India’s housing market boomed in 2024 with record sales, rising new launches, and strong price growth, especially in Delhi-NCR and Bengaluru. Despite low rental yields, analysts at Phillip Capital believe the demand for ownership surged, supported by structural reforms and improved transparency.
The sector’s increasing focus on sustainability, professionalism, and investor participation, they said, marked a significant evolution from its fragmented past.
2025 real estate demand is being shaped by a mix of global and local factors, with residential properties domination. Sustainability and green building practices are also influencing buyer preferences, with environmentally friendly and energy-efficient properties commanding premiums. While affordable and mid-income housing remains the backbone of demand, luxury housing is witnessing strong momentum in wealthier markets, supported by high-net-worth individuals and foreign investors.
The brokerage has initiated coverage on Godrej Properties (GPL) with a ‘Buy’ rating (target: ₹2,614) and Oberoi Realty with a ‘Neutral’ rating (target: ₹1,784).
Real estate sector news
According to reports, the Reserve Bank of India’s draft external commercial borrowing (ECB) policy suggests that the central bank may allow ECBs in all real estate projects that are eligible for foreign direct investments (FDI). A project that qualifies for foreign equity is also eligible for foreign loans.
That apart, reports also say real estate developers have witnessed a 10–15 per cent increase in property inquiries and bookings amid the onset of the festive season.
Frequently Asked Questions
What caused the decline in real estate stocks?
The decline in real estate stocks is primarily due to profit booking and a decline in capital inflows in the real estate sector during the first nine months of 2025.
How has the Nifty Realty index performed recently?
The Nifty Realty index has climbed 3 per cent in just four trading sessions in October, but it slipped 1.6 per cent on the NSE on Wednesday, October 8.
What is the outlook for the Indian housing market in 2025?
The housing demand in India’s real estate sector is expected to hold its ground in key locations in 2025, supported by record launches and rising supply, with a focus on credible developers and prime projects.
What factors are influencing buyer preferences in the real estate market?
Sustainability and green building practices are influencing buyer preferences, with environmentally friendly and energy-efficient properties commanding premiums.
What recent policy changes might affect the real estate sector?
The Reserve Bank of India’s draft external commercial borrowing (ECB) policy suggests that the central bank may allow ECBs in all real estate projects that are eligible for foreign direct investments (FDI).
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