Real estate stocks extend fall: Here's why the sector is falling

Real estate counters continued to decline in Monday's trade even as headline indices remained in positive territory. At last check, the Nifty Realty sub-index was down 0.51 per cent at 901, extending its drop to around 4 per cent over the past five trading sessions.

Barring The Phoenix Mills Ltd, all other constituents were trading in the red. Shares of Anant Raj Ltd, Brigade Enterprises Ltd, Godrej Properties Ltd, Prestige Estates Projects Ltd, Sobha Ltd and Oberoi Realty Ltd slipped up to 1.77 per cent.

Ravi Singh, Chief Research Officer at Mastertrust, said, "Despite the broader market trending higher, real estate stocks have weakened over the past sessions with lagging performance compared to other sectors. The loosening of momentum could be reasoned with rising concerns over sector fundamentals. Operationally, the pace of construction has dropped significantly, widening the gap between new launches and actual delivery, which directly increases the risk of project delays, weaker cash flows and margin pressure if the scenario continues over quarters."

Singh added, "Further, sales have shown signs of some pressure across key markets. Even though there is visible structural demand in real estate, market participants are focusing on the near-term challenges, including valuations and soft operational updates, weighing on sentiment in the short to medium term. Capital inflows from foreign investors have fallen in 2025, reflecting cautious positioning due to a cautious global outlook. Short-term cycles, however, remain an inherent feature of this space. However, the long-term outlook remains intact. Supported by urbanisation, infrastructure growth and evolving consumer base, the realty sector continues to be a vital economic pillar."