Nifty Realty Index Dives 3% Despite RBI Rate Cut: What's Pressuring DLF, Prestige, and Godrej?

Real estate stocks faced sharp declines on the NSE, with the Nifty Realty index dropping up to 3% in intra-day trade on December 8, 2025, even after the RBI's 25 basis points repo rate cut.​

Market Performance Snapshot

Leading developers like DLF, Godrej Properties, Prestige Estate Projects, and Anand Raj each fell 4%, while Macrotech Developers (Lodha), Sobha, Brigade Enterprises, and Oberoi Realty declined 1-3%. By 11:33 AM, the Nifty Realty index was down 2.7%, making it the biggest sectoral loser against a 0.5% drop in Nifty 50. Over the past month, the index lost 8% amid a 2% benchmark gain, and shed 16% in six months versus Nifty 50's 4% rise.​

Key Reasons for Underperformance

October 2025 saw pan-India new launches drop 34% year-on-year in square footage and hit multi-month lows in units, per YES Securities analysts. Absorption held steady at ~80.55 million sq ft, matching 12-month averages, keeping inventory at ~15.6 months with slight price contractions offset by higher average sales pricing. Q2FY26 pre-sales for covered stocks dipped 3% YoY due to fewer launches and extended monsoons, though sustenance sales stayed healthy, says ICICI Securities.

Strong Q2 Highlights Amid Headwinds

Kotak Securities notes residential stocks like DLF, Godrej, Sobha, and Prestige drove 43% YoY pre-sales growth in Q2FY26, with H1 up 44% toward a ₹1.4 trillion full-year target. This outpaced the industry's 11% sales rise on flat 236 million sq ft volumes, fueled by price hikes. High-end demand may moderate from steep rises and softer IT buyer sentiment, but medium-term prospects remain solid with market share gains.​

DLF-Specific Risks and Outlook

DLF faces cash flow mismatches from cyclical sales versus fixed project/debt costs, plus Gurugram reliance vulnerable to slowdowns or oversupply, per CRISIL Ratings. The firm is diversifying with Mumbai re-entry and launches in Goa, Gurugram, and Tricity, though progress needs monitoring. Companies eye H2FY26 launches, especially Q4, to hit annual targets despite soft H1.