Real estate stocks crash: Due to these 3 reasons, the decline in the shares of real estate companies is not stopping,

News Topical, Digital Desk : The bad phase of the real estate sector in the stock market continues. In the last 5 trading sessions, the Nifty Realty Index has seen a sharp decline of 9%, and now on 28 July 2025, it has reached a 2-month low. Big names like Oberoi Realty, Lodha Developers, DLF and Godrej Properties are included in this decline.

What are the reasons behind the fall in realty index?

1. Huge decline in affordable housing -
The supply of houses priced below ₹ 50 lakh has decreased by 54% in Tier-2 cities. However, the supply of houses priced between ₹ 50 lakh and ₹ 1 crore saw a decline of only 12%. This trend shows that demand is now shifting towards mid-segment or premium housing, but weak consumer sentiment in Tier-2 cities is hurting affordable housing. ( Stock Market Crash: These are the 5 reasons due to which there was a huge fall in the market again - 13 lakh crores sunk in 3 days) 2. Weak signals from Lodha and Oberoi On 23 July , a big deal was struck in the shares of Lodha and Oberoi Realty , but thereafter heavy selling was witnessed in both. According to JP Morgan, the development margin of Oberoi has fallen to 45%, which is disappointing for the investors. Lodha has also given bearish guidance regarding Free Cash Flow (FCF) generation, which put pressure on the prices.

Company	Decline
Lodha	-16%
Oberoi Realty	-10%
Godrej Properties	-10%
DLF	-7%

3. Concern over Q1 results
Godrej Properties' results will come on August 1, while the date for DLF and Prestige's results is yet to be decided. There is an atmosphere of uncertainty and panic among investors even before the results.

What does this mean for investors
Realty stocks will remain under pressure for the time being, especially until the Q1FY26 results give a clear picture. Weak demand in Tier-2 cities and muted outlook from companies can further affect market sentiment. Long-term investors should be cautious in selecting stocks by looking at the results and macro data.

For now, keep an eye on the Q1FY26 results and commentary of companies before considering the fall in realty stocks as a 'buy the dip' opportunity.