Realty Stocks Rise Up to 5% amid Rate Cut Hopes; Sobha, Prestige, Oberoi Realty Lead Gains

Realty stocks experienced a robust surge during Tuesday's trading session even as bearish mood dominated the D-street. The Nifty Realty index surged more than a percent and was close to the psychological 1,000 level mark.

Sobha, Brigade Enterprises, Prestige Estates Project and Oberoi Realty were among the top gainers even as the broader market traded in the red territory. BSE Sensex was down by nearly 500 points or 0.61%, trading around 80,875 level mark.

At 02:50 pm, the Nifty Realty index was trading around 984.40 level mark, up by 1.35%. The benchmark Nifty50 index, on the other hand, was trading at 24,564 level mark, down by over 0.6% or 151 points. Sobha Ltd. was the top-performing stock in the Realty index, trading at ₹1,531.60 price level, marking a surge of 5.42%.

While the Nifty Realty index saw most constituents in the green, DLF, Godrej Properties, Embassy Developments, and Hemisphere Properties India bucked the trend.

With rate cut hopes building, Dalal Street investors are closely watching the upcoming RBI MPC meeting. The central bank's decision is scheduled for June 6, 2025 (Friday). And real estate is one of the most rate-sensitive sectors alongside banking. In the last 5 trading sessions, the Nifty realty index has surged over 3.77% or 35 points.

"Since the MPC is expected to cut policy rate by 25 bp in the policy meet on 8th, rate sensitives are likely to be favoured in the coming days," said VK Vijayakumar, chief investment strategist, Geojit Investments Limited.

Meanwhile, real estate players are also hoping for an interest rate cut, as it could strengthen borrowing capacity, eventually improving affordability for homebuyers.

"With construction costs on the rise affecting capital flows, lower interest rates would ease financing pressures for developers. A rate cut would strengthen market confidence, infuse much-needed liquidity, and also act as a strong signal of policy support for the real estate sector and the broader economy, thereby encouraging investments. With sustained demand and softening home loan interest rates, the sector’s growth momentum will definitely accelerate further, firmly establishing the real estate sector as a key driver of the nation's economic development," said Ramani Sastri- chairman and MD, Sterling Developers