NEW DELHI: Realty stocks have given a bigger return than any other stocks during the on-going Covid period. The S&P BSE Realty Index, an indicator of real estate companies’ performance on the bourses, grew 204% between 1st Apr 2020 to 12th Jan 2022, surpassing all sectoral indices’ returns as well as outperforming the broader market, according to data shared by real estate consultant Anarock.
S&P BSE Sensex, the broad indicator of the stock market performance, once again crossed the 61,000-mark on 12th Jan 2022 and is 2.2X of 1st Apr 2020, registering a 116% growth. On the contrary, BSE Consumer Durables Index, S&P BSE Consumer Discretionary Goods & Services Index, and S&P BSE Auto Index grew 138%, 140%, and 149%, respectively between 1st Apr 2020 and 12th Jan 2022.
Anuj Puri, Chairman – Anarock Group, says “Several unique developments helped boost real estate demand to such an extent that the realty index outperformed the other sectors as well as the broader market.” The main factors are cut in stamp duty, lower interest rate and big discounts given by developers.
According to the Real Estate Thematic report of Motilal Oswal Financial Services Limited (MOFSL), the residential real estate sector is poised for an upcycle, primarily buoyed by the improved affordability. Decadal low (sub-7%) interest rate regime, stagnant prices over the last seven years, and rising income base, it added.
MOFSL said it prefers companies which are exposed to Bengaluru, Pune and Mumbai markets. It has given a buy rating on Lodha (Macrotech), Oberoi Realty and is neutral on DLF and Godrej Properties.