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NIFTY 50 22,932.90 Down stock -12.40 (-0.05%)
NIFTY 100 23,368.55 up stock 37.15 (0.16%)
NIFTY 500 20,731.45 up stock 120.05 (0.58%)
NIFTY MIDCAP 50 14,162.75 up stock 166.00 (1.19%)
INDIA VIX 15.42 Down stock -0.25 (-1.56%)
NIFTY MIDCAP 150 18,644.90 up stock 269.05 (1.46%)
NIFTY SMALLCAP 50 7,509.05 up stock 163.05 (2.22%)
NIFTY BANK 49,570.10 up stock 482.80 (0.98%)
NIFTY AUTO 21,809.15 Down stock -9.75 (-0.04%)
NIFTY FMCG 52,360.45 Down stock -120.05 (-0.23%)
NIFTY IT 40,924.25 Down stock -540.10 (-1.30%)
NIFTY MEDIA 1,493.70 up stock 21.05 (1.43%)
NIFTY METAL 8,359.20 up stock 103.60 (1.25%)
NIFTY PHARMA 20,820.00 Down stock -149.20 (-0.71%)
NIFTY PRIVATE BANK 24,778.10 up stock 277.50 (1.13%)
NIFTY REALTY 845.95 up stock 13.90 (1.67%)
NIFTY OIL & GAS 10,045.60 up stock 73.55 (0.74%)
NIFTY COMMODITIES 7,839.00 up stock 57.15 (0.73%)
NIFTY ENERGY 31,198.50 up stock 349.45 (1.13%)
LEADMINI 188 up stock 0.20 (0.11%)
ZINCMINI 261.25 up stock 0.25 (0.1%)
SILVERMIC 89730 up stock 72.00 (0.08%)
GOLDGUINEA 59188 up stock 50.00 (0.08%)
GOLDM 72900 up stock 28.00 (0.04%)
COTTONCNDY 56540 up stock 20.00 (0.04%)
SILVER 89675 up stock 29.00 (0.03%)
CRUDEOIL 6609 Down stock -237.00 (-3.46%)
NATURALGAS 177.5 Down stock -0.30 (-0.17%)
NATGASMINI 177.5 Down stock -0.30 (-0.17%)
MENTHAOIL 942.2 Down stock -1.20 (-0.13%)
ZINC 260.7 Down stock -0.25 (-0.1%)
ALUMINIUM 220.5 Down stock -0.20 (-0.09%)
LEAD 187 Down stock -0.10 (-0.05%)

Updated 10:27 IST, November 3rd 2024

Residential real estate gains momentum, new markets drive growth: Report

Between FY 21 and FY 24, developers scaled in their established market, which induced a large part of the growth observed, said the report.

Reported by: Asian News
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real esate | Image: republic

Real estate growth: The Indian residential real estate sector has witnessed a strong surge in recent years, with the top 15 listed developers reporting a compound annual growth rate (CAGR) of 43 per cent in pre-sales from financial year (FY) 2021 to FY24, reaching Rs 1.2 trillion, according to the Axis Capital report.

Increasing absorption rates and a focus on higher launches across major and emerging markets have propelled this growth in the sector.

Between FY 21 and FY 24, developers scaled in their established market, which induced a large part of the growth observed, said the report.

About 80 per cent of this growth was attributed to existing markets, marking a 36 per cent CAGR, with demand particularly robust in the top seven cities, which saw a 41 per cent growth in value.

"As demand momentum picked up, most of the companies initially focused on scaling up in their existing markets and simultaneously building a pipeline outside of their home market," the report said.

Leading developers, including DLF, Oberoi, and Sunteck, reported higher contributions from new projects within their core regions of the National Capital Region (NCR) and Mumbai Metropolitan Region (MMR). Some companies, such as LODHA and Prestige Estates, have ventured beyond their traditional strongholds into Pune, Bengaluru, and MMR.

Axis Capital observed that the introduction of the Real Estate (Regulation and Development) Act (RERA) has also helped developers to expand outside their home markets, and many have seen successes too.

"Most of the Top 15 listed players invested in markets outside their existing core markets and added an estimated 130 million sq ftin projects worth Rs 1.75 trillion over FY22-24, which is 10x their FY24 pre-sales contribution from these new markets," the report added.

Despite a recent dip in absorption rates due to an uptick in premium and luxury housing options, demand for residential real estate will remain steady, supported by broader choices and stronger positioning of branded developers, the report adds.

Absorption rates are expected to stabilise, with supply increases driving growth, the report adds. For the FY24-26 period, the sector is forecasted to achieve a 24 per cent CAGR in pre-sales, it added.

In terms of supply dynamics, developer participation has surged by 29 per cent since calendar year 2020, especially in MMR and Hyderabad. However, regions like NCR and Bengaluru saw slight declines. Record transaction volumes are being recorded across the top seven cities, with MMR, Pune, and Hyderabad experiencing absorption rates up to four times their previous peak levels, while markets like Bengaluru and Chennai are expected to see further potential as supply constraints ease.

With new supply anticipated in previously supply-restricted areas such as Noida in the NCR and key zones in Bengaluru and Chennai, the report expects growth across the sector to remain robust, with potential increases of 5-10 per cent over the next two to three years. 

Published 10:27 IST, November 3rd 2024