Realty shares rallied sharply on Friday, with the Nifty Realty index topping sectoral charts after the Reserve Bank of India (RBI) delivered a larger-than-expected interest rate cut of 50 basis points and also lowered the cash reserve ratio to infuse additional liquidity into the banking system.
The latest rate action marks the RBI’s third consecutive repo cut in 2025, bringing the total reduction to 100 basis points so far this year. The central bank had earlier reduced rates by 25 basis points each in February and April, resuming its easing cycle after nearly four years.
Analysts said the steep rate cut is a clear positive for the real estate sector as it will help lower home loan interest rates, improving affordability for buyers and boosting demand. It also eases borrowing costs for developers, aiding project financing and expansion.
"The 50 basis points cut will have a twofold impact on real estate. On one hand, it eases borrowing costs for end-users, especially in the mid and upper-mid segments where affordability sensitivity remains high. On the other, it brings down the cost of capital for developers managing ongoing and upcoming projects. The key will be transmission speed by lenders and how much of this benefit flows down to the consumer," said Ashwinder R. Singh, Chair, CII Real Estate Committee; VC & CEO, BCD Group; Advisor, NAR India.
Following the policy announcement, the Nifty Realty index surged 4.5 percent, with all 10 constituents trading in the green. In just two sessions, the index has gained over 6 percent, adding over Rs 30,000 crore in market capitalisation.
Among individual stocks, DLF led the pack, climbing over 6.33 percent to Rs 878 on the NSE. Godrej Properties rose 6.13 percent, while Prestige Estates Projects gained 5.77 percent.
Oberoi Realty, Sobha, Macrotech Developers, and Brigade Enterprises also witnessed strong buying interest, rising between 2 to 5 percent.
Harinder Singh Hora, Founder Chairman, Reach Group, noted "We expect a significant uptick in leasing activity and new project launches, reflecting strong investor and occupier confidence."
"By improving the market sentiment, the rate cut is set to drive sustained demand across both urban and emerging suburban markets," added "Sakshee Katiyal, Chairperson, Home & Soul.
The RBI’s measures are seen as timely, especially as global growth remains under pressure from geopolitical tensions and trade disruptions.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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