Realty Shares Surge on RBI Rate Cut Optimism: Sobha, DLF Lead Gains
Real estate stocks soared up to 6% on Thursday, driven by expectations of a repo rate cut by the RBI. The move is expected to lower home loan EMIs and boost the residential housing sector.
Real EstateRbiRepo RateHousing MarketStock MarketReal Estate NewsJun 05, 2025
Retail inflation fell to a near six-year low of 3.16 percent in April, providing the central bank with more room to focus on growth. The RBI has projected inflation to average around 4 percent for the full financial year. A rate cut would lower home loan EMIs, improving buyer sentiment and supporting demand in the residential housing sector. Lower interest rates also reduce borrowing costs for developers, potentially spurring fresh investments in the real estate market.
Dr. Amish Bhutani, MD of Group 108, believes, 'The previous repo rate cut acted as a crucial catalyst for the commercial real estate sector, especially in Noida and Greater Noida. With borrowing costs lowered, developers were able to accelerate investments in office spaces and retail infrastructure, revitalizing supply pipelines. Looking ahead, a further rate cut, or even policy stability, would boost market confidence, encouraging long-term commitments from investors and occupiers.'
Amit Modi, Director of County Group, added, 'Home loan EMIs today comprise a significant portion of the monthly income for an average urban household. In such a scenario, even a marginal cut in interest rates has a noticeable impact on buyers. A 25-basis point reduction by the RBI can directly bring down EMIs, prompting buyers to take quicker decisions when it comes to property purchases.'
Yash Miglani, MD of Migsun Group, noted, 'Since the RBI hinted at a possible rate cut, there has been a noticeable spike in user activity on real estate portals and an increase in site visits.' The Nifty Realty index emerged as the top-performing sector on Thursday, climbing up to 2 percent during intraday trade.
Sobha Ltd led the rally, jumping 8.71 percent to hit an intraday high of Rs 1,648 per share on the NSE. Among other gainers, Brigade Enterprises rose 4.41 percent, while DLF advanced 2.77 percent. Prestige Estates, Oberoi Realty, Godrej Properties, and Raymond gained between 1 percent and 3 percent.
Kushagra Ansal, Director of Ansal Housing, noted, 'If the RBI cuts rates again, buying a home will become even easier for the middle class.' Saurabh Saharan, Group Managing Director of HCBS Developments, added, 'EMIs form a significant part of the monthly budget for common people. When they decrease, it becomes easier for customers to make quicker decisions. Thus, a relief in interest rates will give a fresh momentum to the real estate sector. This will not only boost buyer confidence but could also set new records in booking trends in the coming months.'
Meanwhile, in today's session, eight of the ten constituents in the Nifty Realty index were trading in positive territory. Anant Raj and The Phoenix Mills were the only stocks in the red during the session.
Frequently Asked Questions
What is the expected repo rate cut by the RBI?
Market participants are widely anticipating a 25 basis points cut in the repo rate by the RBI in the upcoming Monetary Policy Committee (MPC) meeting.
How will a repo rate cut affect home loan EMIs?
A repo rate cut will lower home loan EMIs, making it easier for buyers to afford properties and improving overall buyer sentiment in the housing market.
Which real estate stocks performed well on Thursday?
Sobha Ltd led the rally, jumping 8.71 percent, while Brigade Enterprises rose 4.41 percent, and DLF advanced 2.77 percent.
What is the projected inflation rate for the financial year by the RBI?
The RBI has projected inflation to average around 4 percent for the full financial year.
How does a rate cut impact real estate developers?
A rate cut reduces borrowing costs for developers, potentially spurring fresh investments in the real estate market and revitalizing supply pipelines.
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