The Nifty Realty index fell 1.15% on December 7 after the Reserve Bank of India hiked the benchmark lending rate by 35 basis points to 6.25%. As repo rates rise, lending rates will also increase, reducing the ability to buy homes.

At noon, Oberoi Realty fell 3.07%, Brigade Enterprises fell 2.05%, and DLF and Godrej Properties fell more than 1.5%. For the year, Nifty Realty was flat, up 0.09%.

Several experts believe that if interest rates remain below 9.5%, the impact on housing will be modest. Foreign brokerage CLSA also said demand should remain resilient to the 9.5% mortgage rate, but beyond that, buyers may encounter some headwinds. Currently, the mortgage rate is 8.5%.

Based on the impact of interest rates this cycle, the Knight Frank Affordability Index has averaged a cumulative national-wide deterioration of 3%.

Foreign brokerage firms remain bullish on India’s real estate sector. CLSA sees India as a bright spot amid the global real estate downturn. Its top picks are DLF, Prestige Estates and Sobha, with target prices of Rs 396, Rs 460 and Rs 620, respectively.