Happy days for realty sector as Realty Index scales 10-year highs

No image

Last Updated: 11th December 2022 - 11:22 am

Listen icon

An unlikely sectoral index, BSE Realty Index, hit 10-year highs recently. Even as experts have been talking about weak offtake in residential properties, the undertone appears to be changing gradually. A host of stocks like Godrej Properties, IB Real Estate, Macrotech Developers and Mahindra Lifespaces scaled new highs in the stock market. Smaller names like Prestige Estates, Sobha and Brigade have also showed traction. What is driving these realty stocks?

Two factors contributed to the surge in residential real estate demand. Home loan rates are at an all-time low and most states have given concessions or waive on registration charges. This spurred a spate of investments in residential properties. In FY21, Godrej Properties sold an average of 20 homes per day, even as it beat Macrotech to become India’s largest real estate company. In the Jun-21 quarter, real estate developers have reported a sharp fall in residential inventory and that is changing the outlook for realty stocks.

Also Read: Godrej Properties is India’s largest realty player

The real estate story in India is not just about the crisis of the last few years, but the recovery that is expected in the next few years. Consider some numbers. Macrotech is up over 80% since its listing in April this year. Godrej Properties has doubled since September while Mahindra Lifespaces has tripled in the last 1 year. That is the story with most real estate companies. The moral of the story is that after a very long time, the stock market appears willing to bet on a full-fledged recovery in residential real estate demand. That is the difference!
 

How do you rate this article?
Characters remaining (1500)

FREE Trading & Demat Account
+91
''
By proceeding, you agree to our T&Cs*
Mobile No. belongs to
hero_form

Indian Stock Market Related Articles

Top Growth Stocks Trading at a Discount

by 5paisa Research Team 4th Nov 2024

Best Gold ETFs in India

by 5paisa Research Team 4th Nov 2024

Best Corporate Bonds in India

by 5paisa Research Team 4th Nov 2024

Top 10 Best Government Bonds in India

by 5paisa Research Team 4th Nov 2024

Disclaimer: Investment in securities market are subject to market risks, read all the related documents carefully before investing. For detailed disclaimer please Click here.

Want to Use 5paisa
Trading App?