Real Estate Stocks Rise Up to 3%, Snap 5-Day Losing Streak; Analysts Call the Correction a ‘Healthy Reset’

Real estate stocks rebounded on November 25, ending a five-session losing streak as buying returned across the sector. The recovery lifted the Nifty Realty index into positive territory, with analysts describing the recent decline as a “healthy reset” rather than a sign of structural weakness.

During morning trade on Tuesday, the Nifty Realty index rose over 1% to 898 at 10:50 am, making it the top sectoral gainer of the day.

Top Gainers in the Realty Index

Multiple real estate counters participated in the rebound, with several leading stocks posting notable gains:

• Anant Raj and Phoenix Mills were the top gainers, rising over 3% each.

• Prestige Estates gained around 2%.

• Brigade Enterprises rose over 1%.

• Sobha, Godrej Properties, Oberoi Realty, DLF, and Macrotech Developers (Lodha) saw gains of nearly 1% each.

The broad-based uptick helped reverse the pressure the sector had been under for the past week.

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Analysts: Correction Was a Valuation Reset, Not Structural Weakness

The Nifty Realty index had fallen more than 6% over the previous five sessions, raising concerns about whether the sector’s strong momentum was weakening.
However, analysts clarified that the pullback was primarily due to stretched valuations, not a deterioration in real estate fundamentals.

“Healthy Reset” After Sharp Rally

Shiv Garg, Director at Forteasia Realty, said the correction was a “healthy reset”, as stock prices had run significantly ahead of the sector’s fundamentals.

According to him, demand, bookings, and pricing power remain intact, supporting the sector’s long-term strength. He added that once Q4 results reaffirm cash flow strength and pre-sales momentum, select real estate companies are likely to reclaim leadership.

Long-Term Outlook Remains Strong

Ravi Singh, Chief Research Officer at Master Capital Services, also highlighted that the sector’s long-term story is intact.
He said the real estate market continues to be supported by urbanisation, infrastructure growth, and an evolving consumer base, reinforcing its role as a key economic pillar.

Affordability Concerns and Premium Housing Trends Add to Recent Volatility

Yash Chauhan, Research Analyst at INVasset PMS, said the recent correction also reflects concerns around stretched affordability in major micro-markets and a slower pickup in premium housing, which had driven much of the sector’s re-rating.

However, he emphasised that this does not indicate a structural reversal, as underlying demand drivers such as urban income growth, job additions, and rental yields remain supportive.

What Could Drive the Next Leg of the Rally?

Shravan Shetty, Managing Director at Primus Partners, said real estate stocks could sharply rise if upcoming budget measures and government reforms boost economic growth and improve sales momentum.

However, he also cautioned that risks remain, particularly with the affordable housing segment yet to show a sustained pickup, and rising household debt adding pressure.

Analysts Expect Positive Outlook Into FY26

Despite near-term volatility, the sector’s medium-term outlook remains stable.
Khushi Mistry, Research Analyst at Bonanza, said structural demand in metros and financial discipline among developers support a positive outlook for FY26. While she recommended caution due to recent volatility and affordability challenges, she highlighted the sector’s underlying resilience.

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