Real Estate Stocks Slump as Demand Concerns Loom
Real estate stocks have been on a downward trend for the past three sessions, with the realty index dropping over 2% and taking a 3.5% loss in the last three days. Concerns over slowing demand are prompting investors to take profits off the table.
Real EstateStock MarketDemand ConcernsProfittakingNifty Realty IndexReal Estate NewsSep 25, 2025
The realty index fell by over 2%, bringing the total loss to 3.5% over the past three days, compared to a 1.1% decline in the benchmark Nifty. Eight out of the ten stocks in the index saw a drop on Wednesday, with Godrej Properties leading the decline at 4%. DLF and Oberoi Realty followed with losses of 3.5% and 2.8%, respectively. Lodha Developers and Phoenix Mills also saw their shares drop by more than 2%.
'Realty stocks are seeing some profit-taking after the significant rally last year, as the demand for real estate has turned sluggish while the supply remains strong,' explained 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 a muted business environment.
The Nifty Realty index has seen a remarkable rise of 325% over the past five years, compared to the 127% gain in the benchmark Nifty. About 35% of these gains came in 2024, when the Nifty rose 8.8%. However, so far in 2025, the index is down 14.4%, while the benchmark has advanced by 5.5%.
'Now that the broader markets are witnessing a pullback, the selling pressure in these stocks has intensified due to the unwinding of positions,' noted Ruchit Jain, head of technical research at Motilal Oswal Financial Services. In the past month, the realty index has lost 2.8%, compared to a 0.4% rise in the Nifty.
'While some realty stocks did see price up moves, the volumes were subdued,' Jain added. '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 concluded.
Frequently Asked Questions
What caused the decline in real estate stocks?
The decline in real estate stocks is primarily due to concerns over slowing demand, which has prompted investors to take profits off the table.
How much has the realty index dropped in the past three days?
The realty index has dropped over 2% in the past three days, taking its total loss to 3.5%.
Which real estate companies saw the most significant declines?
Godrej Properties, DLF, and Oberoi Realty saw the most significant declines, with losses of 4%, 3.5%, and 2.8%, respectively.
What is the outlook for real estate stocks in the near future?
Experts suggest that further declines of 5-7% cannot be ruled out, and the volatility is expected to persist until the verdict on tariffs is announced in November-December.
How has the Nifty Realty index performed 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 index is down 14.4%, while the benchmark has advanced by 5.5%.
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