Realty stocks tumble as rate-hike fears return

The Nifty Realty index plunged 4.36% to 834, hitting a more than two-month low on September 11 amid a broad market selloff. Godrej Properties,

and Prestige Estates led the decline, falling 6.2%, 6% and 4.6%, respectively, while Oberoi Realty and DLF also fell sharply. The immediate trigger was rising global inflation and renewed concerns over US monetary policy. US producer-price inflation showed renewed pressure from higher energy prices, increasing expectations of a Federal Reserve rate hike next week. US 10-year Treasury yields moved close to 5%, while India's 10-year government bond yield crossed 7%, putting pressure on interest-rate-sensitive sectors such as real estate. Higher borrowing costs can weigh on housing demand, financing costs and valuations for developers. However, the sector's underlying demand remains an important support, with leading developers continuing to report strong pre-sales and expanding across major markets. Godrej Properties and Lodha had both reported 16% growth in FY26 pre-sales, to ₹34,171 crore and ₹20,530 crore, respectively. The key risk now is further pressure from global yields and oil-led inflation. Investors should track the upcoming US CPI data and the Fed's policy signals for direction. Overall, the selloff appears largely driven by macro and rate concerns rather than a sector-specific deterioration. Strong housing demand could support a recovery, but near-term volatility may remain high until rate expectations stabilise.