Real Estate Stocks Surge Post RBI Rate Cut: Nifty Realty Jumps Over 3%
The real estate sector witnessed a significant boost after the RBI's Monetary Policy Committee (MPC) announced a 50 basis points cut in the repo rate, leading to a 3% increase in Nifty Realty. Key players like Godrej Properties, DLF, and Oberoi Realty saw substantial gains.
Real EstateRbiRepo RateNifty RealtyStock MarketReal Estate NewsJun 06, 2025
Nifty Realty, the benchmark index for the real estate sector, witnessed a surge of over 3%, with all stocks in the realty indices showing positive movement. Raymond was the only exception, trading in the red. According to Rajesh Bhosale, Equity Technical and Derivative Analyst at Angel One, Nifty Realty is experiencing a strong upward trend post the RBI policy, with a gain of more than 2.5%. He advises traders to maintain a positive bias, using minor dips to buy stocks, particularly in DLF, Lodha, and Godrej Properties.
Prashanth Tapse, Research Analyst and Senior Vice President of Research at Mehta Equities, explained that the real estate sector's performance is a direct result of the RBI MPC's surprising decision to cut the repo rate by 50 basis points—double the market's expectation of a 25 bps reduction. This move brings the repo rate down to 5.5%, marking the third consecutive rate cut in 2025, with a cumulative reduction of 100 basis points.
The aggressive monetary easing by the RBI aims to stimulate economic growth, reduce borrowing costs, and make home loans more affordable, directly benefitting the real estate sector. The RBI’s move is expected to enhance banking system liquidity, empowering lenders to pass on the benefits to homebuyers more effectively.
Niranjan Hiranandani, Chairman of NAREDCO and the Hiranandani Group, stated that the rate reduction is set to bolster credit lending, accelerate buying velocity, and enhance development momentum in the real estate sector. The decline in home loan interest rates will directly benefit homebuyers by improving affordability and cushioning their financial commitments.
Lower mortgage rates make home ownership more attainable, driving greater demand and fostering stronger sales indices. Additionally, this move could spur refinancing activity and strengthen investment interest in branded properties known for their attractive returns, particularly among Grade A developers.
RBI Governor Sanjay Malhotra announced that the Monetary Policy Committee (MPC) has decided to reduce the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points, bringing it down to 5.50% effective immediately. As a result, the standing deposit facility (SDF) rate will be adjusted to 5.25%, while the marginal standing facility (MSF) rate and the Bank Rate will be set at 5.75%.
In conclusion, the RBI's recent policy measures are expected to provide a significant boost to the real estate sector, enhancing liquidity, reducing borrowing costs, and driving demand in the housing market. Investors are advised to consult with certified experts before making any investment decisions.
Frequently Asked Questions
What is the current repo rate after the RBI's recent announcement?
The current repo rate is 5.50% after the RBI's recent 50 basis points cut.
Which real estate stocks saw the most significant gains after the RBI's rate cut?
Godrej Properties, DLF, Oberoi Realty, Prestige Estates Projects, and Sobha saw gains between 3% to 6%.
How does the reduction in the repo rate benefit the real estate sector?
The reduction in the repo rate reduces borrowing costs, makes home loans more affordable, and enhances banking system liquidity, directly benefiting the real estate sector.
What is the expected impact of the RBI's policy on housing demand?
The policy is expected to drive a strong revival in housing demand and real estate investment, particularly in the affordable and mid-income housing segments.
Who is the current RBI Governor, and what was the recent policy announcement?
The current RBI Governor is Sanjay Malhotra, who announced a 50 basis points cut in the repo rate to 5.50%.
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