Real Estate Stocks Surge: Top Reasons Behind the Rally
The shares of several real estate companies experienced a significant boost on September 15, pushing the Nifty Realty index up by around 2.6 percent. The index emerged as the top sectoral gainer on the same day, reaching 908 in the afternoon, its highest level in 13 sessions. Here are the three primary reasons behind this rally.
US Fed Rate Cut Hopes: The US Federal Reserve is set to hold its FOMC meeting from September 16 to September 17. Analysts increasingly expect the American central bank to cut interest rates, driven by weakening jobs data and pressure from the Trump administration. The US economy likely created 911,000 fewer jobs in the 12 months through March than previously estimated, according to the latest data from the Bureau of Labor Statistics. This further increased the likelihood of a rate cut.
While Indian real estate players are primarily focused on the domestic market, analysts anticipate that a rate cut by the US Federal Reserve will be followed by a similar move by the Reserve Bank of India (RBI). A rate cut by the RBI’s Monetary Policy Committee will reduce home loan EMIs for home buyers, thereby stimulating demand and boosting real estate stocks.
UP Govt Plans Changes to Bylaws for Noida and Other Areas: The Yogi Adityanath-led Uttar Pradesh government is planning to remove ground coverage limits and increase the floor area ratio for industrial, residential, and commercial projects as part of its new common building bylaws for Noida, Greater Noida, and YEIDA, according to a report by the Times of India. These changes are expected to ease construction rules, attract more investment, and eliminate confusion caused by differing regulations across authorities.
If approved, these reforms will likely benefit real estate players active in these areas, including Godrej Properties and DLF.
Value Buying: The Nifty Realty index has sharply corrected from its record high level. The sectoral index is currently down more than 20 percent from its 52-week high of 1,140.4. It has fallen nearly 10 percent in the past three months and is down around 13 percent in 2025 so far. After such a significant correction, investors may have resorted to value buying, pushing the stocks higher.
Anant Raj shares were the top gainers on the index, rising around 12 percent to trade at Rs 598 apiece. This surge comes after a report suggested that the government is considering a 20-year tax break for data centers. Prestige Estates shares jumped nearly 3 percent to trade at Rs 1,593 apiece. DLF shares also surged around 3 percent to trade at Rs 779 apiece. Phoenix Mills, Godrej Properties, Oberoi Realty, and Macrotech Developers (Lodha) shares jumped nearly 3 percent each. Sobha, Brigade Enterprises, and Raymond shares rose around 2 percent each.
