Low-interest rates and hopes of a faster economic recovery post pandemic has boosted realty stocks. Major banks like SBI, HDFC, Kotak Mahindra Bank etc are lowering rates to perk up demand. HDFC announced a special interest rate of 6.7% for the homebuyers. Additionally, there has been a slash in stamp duty for registration in states like Karnataka and Maharashtra, which is further triggering the sector to catch pace. Karnataka reduced the stamp duty by 2% recently for property worth Rs 45 lakh. This has made the middle class grab the opportunity. Market analysts believe that other states might catch up soon.
Registrations On A High
According to a recent Motilal Oswal report, almost 6,000 units were registered in the first 21 days of September. In fact, overall registrations will be about 7,000 units by the end of the month, which will be a record in the last decade. Higher registrations have been witnessed in some of the prominent Mumbai realty companies, namely Godrej Properties, Oberoi Realty and Sunteck Realty.
Credit rating firm ICRA in its report, stated home buyers have been looking for completed inventory and developers with a track record of on-time as well as quality project completion.
Recovery In Residential Properties
Stronger sales and weak launches are fastly getting absorbed in the piling inventory. The favourable demand-supply situation is helping the real estate sector to rebound after six long years. Godrej Properties has seen a remarkable increase in the sales of Rs 575 crore in a single day at its project in Noida. The company is even looking to launch 13 million sq. ft of residential projects in FY22. Bengaluru-based Prestige Estates is looking to increase its market share by 50-100% in the next 3-4 years. It expects to launch residential properties of 12-15 million sq. ft till March 2022. Meanwhile, other property developers like Sunteck, DLF, Sobha etc are also witnessing a rally in their sales.
Bull Run In Future?
Such a run is expected in the future. With the current rally, various market experts believe that the time for the real estate market to boost has come. With low interest rates and a steady economy, the middle class are the first ones to buy properties. NRIs are also actively participating, given that the opportunity is ripe to invest in the sector. The demand for homes is not going anywhere anytime soon. With high demand, developers in the listed space are getting more aggressive, looking to grow at a double-digit sales CAGR over the next 2-3 years.
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