Shares of several real estate developers, including Signature Global, Godrej Properties, DLF and Prestige Estates, came under selling pressure in early trade recently amid concerns that India’s multi-year housing upcycle may be facing near-term headwinds.

The decline follows softer pre-sales commentary from some developers and reports of moderation in housing demand, even as brokerages remain divided on whether the sector is entering a slowdown or a phase of normalization, according to a report by CNBC TV18.

In the first few trading sessions of 2026, shares of Signature Global declined 16%, followed by DLF, Prestige Estates, and Godrej Properties, which are down between 4% to 5.5%.

As part of its quarterly business update, Signature Global highlighted that it will not be able to meet its pre-sales guidance of ₹12,700 crore, which looked comfortable for the company some months ago. It attributed this to the overall market environment, which has turned “softer”, thereby impacting them.

According to a report from Knight Frank, the NCR Housing Market has seen a measured moderation in 2025 and that most of the earlier post-pandemic surge was driven by pent-up demand.

“The market now appears to be transitioning into a more stable phase, with demand-supply dynamics normalizing,” the report stated further.

Among other companies, Sobha reported a 18% growth in pre-sales to ₹1,818 crore for the December quarter. Volumes were flat from last year at 1.3 million square feet.

While Lodha reported a 25% growth in pre-sales, the same metric for fellow Mumbai-based developer Keystone saw pre-sales dip by 3%.

In a note on December 31, Equirus wrote that there is some impact seen in residential real estate demand in some pockets in the market.

Jefferies has written in a note that flat volumes have raised concerns on a potential residential cycle reversal, from an upturn, which has now gone on for over five years.

However, the brokerage believes that the upcycle still has legs with volume growth reviving to 5% to 10% in 2026, led by the mid-segment. This, coupled with the 6% to 8% pricing gains should drive 10% to 15% industry value growth, according to Jefferies.

The Nifty Realty index has underperformed the Nifty 50 and the Nifty Midcap index by 26 percentage points and 22 percentage points respectively in 2025 and the stocks are now trading below historical averages.

Nine out of the 10 constituents of the Nifty Realty Index are now trading with losses.