Real Estate Stocks Surge: Godrej Properties, DLF, and Others Rally After RBI Rate Cut
Real estate stocks experienced a significant boost on June 6 following the Reserve Bank of India's (RBI) 50 basis point reduction in the repo rate. This move is expected to make home loans more affordable and stimulate property purchases, particularly in the affordable and mid-income segments.
Real EstateRbiRepo RateProperty MarketAffordable HousingReal Estate NewsJun 06, 2025
Lower interest rates are anticipated to make home loans more affordable, thereby enhancing housing demand and encouraging more property purchases, especially in the affordable and mid-income segments.
The Nifty Realty index soared by 4.45% to 1,037.25, while the BSE Realty index climbed sharply by 4.55% to 8,054.96 as of 1:35 PM. Leading the rally was Godrej Properties, which jumped 6.82% to Rs 2,469.45. Prestige Estates followed with a 5.98% gain to Rs 1,723.45, while DLF rose 5.88% to Rs 874 and Oberoi Realty advanced 5.28% to Rs 1,895.70.
Other gainers included Sobha, up 4.66% to Rs 1,679.60, and Lodha, which rose 3.79% to Rs 1,517.30. Mid-cap and smaller real estate firms also saw positive momentum, with Signature Global gaining 3.63%, Brigade Enterprises advancing 2.09%, Phoenix Mills rising 1.47%, and Anant Raj Ltd inching up by 0.62%.
Anuj Puri, Chairman of ANAROCK Group, commented that the rate cut was widely anticipated due to easing inflation trends and would directly support buyer affordability. He noted that home loan EMIs are expected to become cheaper, which could significantly boost demand, particularly in the affordable and mid-income housing categories.
Puri also pointed out that the affordable housing segment had suffered the sharpest declines post-pandemic, with its sales share falling from 38% in 2019 to just 18% in 2024. However, a notable 19% reduction in unsold inventory indicates persistent end-user demand.
Puri further explained that the reduction in the Cash Reserve Ratio (CRR) would help inject more liquidity into the banking system, enabling banks to lend more freely. This would not only allow developers better access to capital, helping them complete projects on time, but would also give banks room to reduce home loan rates.
He cautioned, however, that global trade tensions and increased costs of imported construction materials could dampen the overall benefit, particularly in the luxury and commercial segments. Sustained growth, he said, will depend on further policy support and greater reliance on domestic sourcing.
Harsh Jagwani, Managing Director at Notandas Realty, echoed similar optimism, calling the rate cut a “welcome move” that provides a much-needed boost to both aspiring homebuyers and long-term investors. He emphasized that lower borrowing costs will lift demand across residential segments and also reduce capital costs for developers.
Jagwani observed that the RBI’s shift to a neutral policy stance reflects growing confidence in India’s macroeconomic stability, even as it keeps an eye on evolving liquidity trends. He added that while this could be the final rate cut for the year, the move will spur broader economic recovery across sectors.
Amit Mamgain, Director at Yugen Infra, also praised the RBI's decision, stating that reduced repo rates could further energize demand in both residential and commercial markets.
He pointed out that home loans dipping below 7.75% would make housing more affordable, particularly for middle-income buyers in Tier 2 and Tier 3 cities, where interest rates play a major role in buyer decisions.
According to Mamgain, this cut will not only help borrowers through cheaper EMIs but also build investor confidence and strengthen overall market sentiment.
Frequently Asked Questions
What triggered the surge in real estate stocks on June 6?
The surge in real estate stocks on June 6 was triggered by the Reserve Bank of India's (RBI) announcement of a 50 basis point cut in the repo rate, reducing it to 5.5%. This move is aimed at supporting economic growth amid moderating inflation.
How will the repo rate cut affect home loans?
The repo rate cut is expected to make home loans more affordable by reducing interest rates. This will lower home loan EMIs, making it easier for buyers to purchase properties, especially in the affordable and mid-income segments.
Which real estate companies saw the biggest gains?
Godrej Properties saw the biggest gain, jumping 6.82% to Rs 2,469.45. Other significant gainers included Prestige Estates, DLF, and Oberoi Realty.
What are the long-term benefits of the repo rate cut for the real estate sector?
The long-term benefits of the repo rate cut include increased liquidity in the banking system, reduced capital costs for developers, and enhanced buyer affordability. These factors are expected to boost demand and support sustained growth in the real estate market.
What challenges could still affect the real estate market despite the rate cut?
Despite the rate cut, challenges such as global trade tensions and increased costs of imported construction materials could dampen the overall benefit, particularly in the luxury and commercial segments. Sustained growth will depend on further policy support and greater reliance on domestic sourcing.
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