Real Estate Stocks Plummet After RBI Hikes Repo Rate and Shifts Stance

Nearly all listed real estate companies traded significantly lower after the RBI announced a 25 basis point hike in the repo rate to 5.50 percent. Major developers like DLF, Lodha Developers, and Prestige Group all closed in the red as the rate hike and calibrated tightening stance signaled rising home financing costs and pushed back expectations for near-term rate cuts.

Housing finance experts note that entry-level homes and first-time homebuyers, particularly from Economically Weaker Sections and Low-Income Groups, will likely see further moderation in demand due to sensitivity to affordability changes. However, genuine housing demand is expected to remain resilient during the festive season, and premium and luxury-oriented markets anticipate minimal impact on sales.

Analysts point out that interest and mortgage rates remain well below recent peaks from 2022 and 2023, when rates touched 9 percent due to tighter monetary policy. Consequently, the recent 25 basis point hike is not expected to trigger a steep price decline for realty scrips, with the primary market disappointment stemming from the lack of anticipated rate cuts.