Real Estate Stocks Slump Amid Demand Sluggishness Concerns
Mumbai: Real estate stocks experienced a decline on Wednesday, extending their losses into the third session, as concerns over slowing demand led investors to take profits.
Real EstateStocksDemandNiftyProfittakingReal Estate MumbaiSep 25, 2025
Eight of the 10 stocks in the index fell on Wednesday. Godrej Properties slid 4%, while DLF and Oberoi Realty fell 3.5% and 2.8%, respectively. Lodha Developers and Phoenix Mills each lost more than 2%.
"Realty stocks are seeing some profit-taking after the runaway rally last year, as the demand for real estate has turned sluggish while the supply remains strong," said Dharmesh Kant, head of research at Cholamandalam Securities. He added that further declines of 5-7% cannot be ruled out. In the premium segment, new launches have been limited after the euphoric demand last year, while mid-tier real estate players have also seen muted business.
The Nifty Realty index has risen 325% over five years, compared with the 127% gain in the benchmark Nifty. About 35% of those gains came in 2024, when the Nifty rose 8.8%. So far in 2025, the index is down 14.4% against the 5.5% advance in the benchmark.
"Now when the broader markets are witnessing a pullback, the selling pressure in these stocks intensified due to unwinding of positions," said Ruchit Jain, head of technical research at Motilal Oswal Financial Services.
In the past month, the realty index has lost 2.8%, compared with a 0.4% rise in the Nifty.
"While some realty stocks did see price up moves, the volumes were subdued," Jain said. "However, the higher volumes during the declines indicate bearish sentiment."
"The verdict on the tariffs is expected by November-December, until then the volatility is expected to sustain," Kant said.
Frequently Asked Questions
Why are real estate stocks declining?
Real estate stocks are declining due to concerns over slowing demand, which has led investors to take profits after a strong rally last year.
What is the performance of the Nifty Realty index compared to the benchmark Nifty?
The Nifty Realty index has risen 325% over five years, compared to a 127% gain in the benchmark Nifty. However, in 2025, the realty index is down 14.4% while the Nifty has advanced 5.5%.
Which real estate companies have seen significant declines?
Godrej Properties slid 4%, DLF and Oberoi Realty fell 3.5% and 2.8% respectively, while Lodha Developers and Phoenix Mills each lost more than 2%.
What factors are affecting the demand for real estate?
The demand for real estate has turned sluggish, with new launches in the premium segment limited after last year's high demand, and mid-tier players seeing muted business.
What is the outlook for real estate stocks in the near future?
Further declines of 5-7% in real estate stocks cannot be ruled out, and volatility is expected to sustain until the verdict on tariffs, expected by November-December.
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