Real Estate Stocks Drop Up to 5% as Investors Book Profits Amid Decline in Foreign Inflows

Real estate stocks witnessed a sharp decline on Wednesday, October 8, as investors opted to book profits following a recent rally. The sector was among the biggest losers on the National Stock Exchange (NSE), reflecting a broader dip in market sentiment due to weaker foreign capital inflows and global economic uncertainty.

The Nifty Realty Index slipped and closed by1.83% to 875.40, emerging as the top sectoral loser of the day. Among individual counters, Anant Raj Limited shares fell by 4.85% and closed to ₹699.95. Oberoi Realty dropped 3.6%, while Brigade Enterprises, Signature Global, and Godrej Properties lost 1.5%, 2.45%, and 1.92%, respectively. DLF declined 1.66%, and shares of Phoenix Mills, Prestige Estate Projects, and Lodha Developers were down between 0.6% and 1.16%.

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In comparison, the Nifty50 Index traded an closed down by 0.25%, showing that real estate bore the brunt of the market correction.

Recent Rally Paused After Four Strong Sessions

This drop followed four consecutive trading sessions of strong gains for the real estate sector earlier in October. On Tuesday, Anant Raj had jumped 4.34%, Brigade Enterprises rose 3.64%, and Lodha Developers climbed 2.68%, while Phoenix Mills gained 1.09%.

Stocks of Oberoi Realty, Godrej Properties, and DLF had also recorded smaller upticks ranging from 0.25% to 0.88%, pushing the Nifty Realty Index up 1.08%. Overall, the index had gained 3% in just four trading sessions, prompting some investors to secure profits.

Falling Foreign Capital Inflows Weigh on Sentiment

Apart from profit-taking, declining foreign investment in the real estate sector appears to have dampened investor confidence. According to a Colliers India report, capital flows into India’s real estate sector dropped 9% year-on-year to $4.3 billion during the first nine months of 2025.

The slowdown was mainly driven by a 36% fall in foreign investments, which shrank to $2.1 billion, reflecting global investors’ cautious stance. However, domestic investors helped offset some of the impact, injecting $2.2 billion, a 52% rise year-on-year.

Sector Outlook: Demand Resilient Despite Global Challenges

Despite short-term volatility, analysts remain optimistic about India’s housing market. They believe that demand in key cities will remain firm in 2025, supported by record project launches, growing supply, and healthy sales.

For FY2025-26, the market is expected to stabilise, favouring credible developers and prime projects, provided global disruptions stay limited.

The Indian housing sector recorded strong growth in 2024, with record sales and price appreciation, particularly in Delhi-NCR and Bengaluru. Analysts at Phillip Capital attributed the boom to structural reforms, transparency improvements, and rising ownership demand, even as rental yields stayed low.

They further noted that sustainability and green building practices are now influencing homebuyer preferences, with energy-efficient projects commanding premium valuations. While affordable and mid-income housing continue to lead demand, luxury housing is also gaining traction, backed by wealthy domestic and foreign investors.

Festive Momentum and Policy Developments Support Optimism

Market experts also point to supportive developments such as the Reserve Bank of India’s proposed external commercial borrowing (ECB) policy, which may allow foreign loans for projects eligible for foreign direct investment (FDI).

Additionally, real estate developers have reported a 10–15% rise in property inquiries and bookings with the onset of the festive season, suggesting underlying market strength despite short-term corrections.

Conclusion

In summary, the latest dip in real estate stocks reflects profit-booking and weaker foreign capital inflows rather than a structural slowdown. Analysts expect India’s real estate sector to stay resilient, driven by strong domestic participation, continued housing demand, and supportive policy measures in the coming quarters.