BSE Realty Index crosses 4,000 level. Will the rising momentum continue?


The BSE Realty Index crossed the 4,000 mark amid optimism and improved sentiment over real estate market that is predicted to be strong in the new year. Among individual realty stocks, Oberoi Realty, DLF, Prestige, Lodha were leading the gains in the pack.

The residential market turned a corner in 2021 with sales momentum consistently improving over the year. The industry continues to consolidate with residential developments steadily shifting into the hands of stronger developers, many of which are listed, who have been able to weather the economic storm created by the pandemic, believe experts.

“Low interest rates, improving affordability, high savings rate during 2020 and a resurging interest in home ownership due to the space constraints imposed by the pandemic, have been the primary drivers of this revival in demand,” said Sharad Agrawal, Executive Director – Capital markets, Knight Frank India.

The Knight Frank Affordability Index, that tracks the EMI (Equated Monthly Instalment) to income ratio for households, improved further in 2021 across all cities. Affordability has improved dramatically since 2015 as the combined impact of slowing price growth and falling interest rates was much greater in this period. 

“2022 is expected to set a new benchmark where all the stakeholders of the real estate industry will collaborate to harness latent demand for homes. Institutional investors are actively looking at investment opportunities across the capital stack on both the equity and debt side. With macro fundamentals in check for the realty estate industry will keep the index on the upward trend in the medium to long term,” said Dhaval Ajmera, Director of Ajmera Realty and Infra India.

The various initiatives by the state & central government are keeping the residential asset class in favour. This has revived the residential sector leading to uptrend at many levels. 

“Despite the fact that the markets were trembling the realty index held up well in the midweek trading. The realty index is likely to maintain its rising momentum even further,” said Rohit Poddar, Managing Director, Poddar Housing and Development.

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