Realty Stocks Extend Losing Streak to Seven Sessions as IT Layoffs Rattle Demand — Why Investors Are Growing Cautious
Indian real estate stocks are sending an uncomfortable signal to the market. For the seventh straight session on January 14, the sector remained under pressure, with investors increasingly pricing in the risk that sustained IT layoffs could weaken housing demand in key urban markets. What began as routine profit-booking has now evolved into a deeper narrative around job security, discretionary spending and the vulnerability of premium housing demand.
The Nifty Realty index slipped about 1.7 percent in morning trade to touch a near nine-month low of 843.60. Over the past seven sessions, the sector has corrected nearly 8 percent, making it one of the weakest pockets on Dalal Street in the short term. For investors and traders alike, the question is no longer whether sentiment has weakened — but how far the market may already be discounting the slowdown.
Selling pressure intensifies across key realty names while a few stocks resist the slide
The weakness on January 14 was broad-based across real estate counters. Signatureglobal (India) and Prestige Estates both fell over 2 percent, while Macrotech Developers (Lodha), Brigade Enterprises and Phoenix Mills declined more than 1 percent each. Anant Raj and Godrej Properties also slipped around 1 percent, and Sobha traded in the red with marginal losses. Only a handful of stocks such as Oberoi Realty and DLF managed to buck the trend, trading with marginal gains even as the sector remained under pressure.
This divergence is important for investors. It suggests the market is not abandoning real estate entirely, but becoming more selective — favouring stronger balance sheets and established brands while punishing companies perceived to be more exposed to demand volatility.
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Here’s what happened today and why traders reacted
The seventh consecutive day of decline has been driven by a mix of narrative shifts and positioning behaviour rather than any single data point. Traders have been steadily reducing exposure to the sector as concerns around IT layoffs gain traction and as price momentum remains negative.
What impacted the market today
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The Nifty Realty index slipped around 1.7 percent, extending the seven-day losing streak.
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The sector has now corrected nearly 8 percent over seven sessions, breaking below key technical support levels.
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Market commentary increasingly linked IT layoffs with weakening demand in premium housing markets.
Why traders reacted the way they did
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Traders tend to avoid sectors showing persistent negative momentum.
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The breakdown to near nine-month lows triggered fresh short positions and stop-loss selling.
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Concerns around luxury housing demand reduced confidence in near-term earnings visibility.
What signals investors are tracking now
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Whether IT layoffs continue to accelerate through FY26.
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Demand trends in cities like Bengaluru and Hyderabad, which are heavily dependent on tech employment.
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Management commentary from real estate companies on bookings and new launches in upcoming quarters.
The immediate impact on trader portfolios has been clear: short-term participants are cutting exposure or turning defensive, while longer-term investors are reassessing entry points rather than rushing to buy the dip.
IT layoffs are emerging as the dominant narrative behind the sector’s weakness
A growing body of analyst commentary points to one core concern — job insecurity in the technology sector is beginning to affect buyer behaviour in premium housing markets. Shashank Gupta, Director at RPS Group, said IT layoffs are likely to be a major reason for lower demand in luxury segments of urban centres such as Bengaluru and Hyderabad, as uncertainty discourages high-income buyers.
He added that mid-to-premium housing sales, which have already fallen 15 percent year-on-year, could remain under pressure as professionals delay upgrades and choose to rent instead of commit to long-term purchases amid job uncertainty.
The concern is not hypothetical. The Indian IT sector has already seen significant workforce reductions. Tata Consultancy Services disclosed on January 12 that it released 6,000 employees in Q2 and around 1,800 employees in the December quarter. Earlier, Moneycontrol had reported that TCS plans to let go of about 2 percent of its workforce, or over 12,000 employees, over 2026. HCLTech also reported a net reduction of 261 employees in the December quarter, taking its total headcount to 2,26,379.
AI disruption is adding a second layer of anxiety for real estate investors
Beyond layoffs, some analysts believe the market is also beginning to factor in longer-term risks from automation and artificial intelligence. One analyst noted that Nifty Realty is already down 20 percent from its peaks, and warned that automation could stifle up to 30 percent of IT-driven luxury housing demand by 2027. According to this view, further stock corrections of 5–7 percent cannot be ruled out unless RBI rate cuts or supportive policy measures revive sentiment by the second quarter of 2026.
Keshav Mangla, GM Business Development at Forteasia Realty, cited Anarock data to highlight that fintech layoffs of over one lakh employees since 2024 have already contributed to a 12 percent drop in demand across Tier-1 cities, creating cash flow challenges for developers and forcing them to push harder on inventory sales.
Mangla described the situation as a “double-edged sword for real estate stocks,” noting that generative AI tools could eventually reduce 20–25 percent of coding jobs, which could in turn affect HNI investments that currently support nearly 30 percent of luxury property launches.
Analysts warn further downside is possible, but not everyone sees a structural breakdown
Some experts are openly cautious. Anurag Goel, Director at Goel Ganga Developments, said that falling stock prices in companies like Brigade and Sobha reflect investor fears of prolonged sales stagnation. He pointed out that the number of new launches in Q3 2025 declined 18 percent, and suggested that the market is only partially pricing in AI-related risks. Goel warned that in the absence of a policy stimulus, real estate stocks could decline another 8–10 percent from current levels.
However, not all voices are pessimistic. Harshal Dasani, Business Head at INVasset PMS, believes the market may be overestimating the threat. “AI is more a productivity lever than a demand destroyer at this stage. It may change how space is used, but it does not eliminate the need for physical offices, especially in collaborative and client-facing roles,” he said.
Dasani added that residential demand continues to find support from employment outside pure tech, improving household balance sheets and relatively low speculative supply. In his view, the sector is going through an adjustment rather than a breakdown.
What this means for investors watching real estate stocks now
For investors, the current phase is less about panic and more about prudence. The market is clearly discounting near-term headwinds, particularly in tech-heavy cities and premium housing categories. That has impacted portfolio sentiment, with many investors either reducing exposure or waiting for clearer signals on demand recovery.
In the coming days, the sector’s direction will likely depend on three factors: further updates from IT companies on hiring and layoffs, commentary from real estate firms on bookings and launches, and broader market sentiment around interest rates and policy support. Until visibility improves, realty stocks may continue to see selective pressure rather than a swift rebound.
