Realty Stocks Slump as Profit Booking Continues, Godrej Properties Drops 4%
Real estate stocks experienced a decline for the third consecutive day on September 24, with Godrej Properties and Oberoi Realty leading the losses. The Nifty Realty Index fell 2.48%, reflecting ongoing profit booking and market volatility.
Real EstateStock MarketProfit BookingNifty Realty IndexGodrej PropertiesReal Estate NewsSep 24, 2025
This recent decline comes after a prolonged period of gains in real estate stocks. Earlier in September, the sector experienced a positive run, with stocks rising for six out of seven consecutive sessions. This upward momentum was largely attributed to rate cuts by the Federal Reserve and reforms in the Goods and Services Tax (GST).
Nuvama Institutional Equities, a leading brokerage firm, has noted that the real estate sector should prepare for increased volatility. The firm highlighted several challenges, including a lack of middle-income housing, declining housing affordability, and slow volume growth. According to Nuvama, these factors are likely to keep the sector volatile, with stocks expected to remain range-bound. While falling mortgage rates may provide some support, concerns over valuations and volume growth are expected to cap any significant upward movement.
The brokerage also pointed out that sales volumes have decreased between June 2024 and May 2025. Rising home prices have reduced affordability, particularly in the premium and luxury segments, which have dominated sales. This trend has led to a narrower housing cycle, with slower growth in investor-driven demand. However, the firm expects price increases to slow down, which could help stabilize the market.
Nuvama anticipates that the National Capital Region (NCR) and Pune will remain the strongest markets, with inventory levels of just 10 and 13 months, respectively. Other cities, such as Mumbai, have higher inventory levels, ranging from 17 to 21 months, with Hyderabad having an inventory level of 26 months. The firm believes that these higher inventory levels will continue to pose challenges for the real estate sector.
In a separate note last week, Nuvama suggested that the market consistency seen from FY21 to FY24 may no longer continue. Bengaluru and Chennai’s housing markets still have room for growth, while Hyderabad may have already peaked. The Mumbai Metropolitan Region (MMR) is described as being in a mid-cycle phase, while Pune is experiencing “growth fatigue.” Gurugram, on the other hand, is grappling with housing affordability issues.
Overall, the real estate sector faces a mix of challenges and opportunities. While falling mortgage rates and strong markets in NCR and Pune offer some positive outlook, concerns over valuations, volume growth, and affordability will continue to influence market dynamics.
Frequently Asked Questions
What caused the decline in real estate stocks on September 24?
The decline in real estate stocks on September 24 was primarily due to profit booking, which continued for the third consecutive day. This activity was driven by a combination of factors, including market volatility and concerns over valuations and volume growth.
Which companies were the top losers on the Nifty Realty Index?
Godrej Properties and Oberoi Realty were the top losers on the Nifty Realty Index on September 24. Godrej Properties fell by over 4%, while Oberoi Realty declined by 2.76%.
What are the main challenges facing the real estate sector?
The main challenges facing the real estate sector include a lack of middle-income housing, declining housing affordability, and slow volume growth. These factors are expected to keep the sector volatile and range-bound.
How do mortgage rates affect the real estate market?
Falling mortgage rates can provide support to the real estate market by making home loans more affordable. This can help stabilize the market and soften the downward pressure on stock prices.
What is the current state of the National Capital Region (NCR) and Pune real estate markets?
The National Capital Region (NCR) and Pune are currently the strongest real estate markets, with inventory levels of just 10 and 13 months, respectively. These low inventory levels indicate a robust demand for housing in these regions.
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