Sales of residential real estate properties have picked up in the wake of the forthcoming festive season, in turn giving a leg-up to the Nifty Realty Index, which scaled a new 52-week high on Thursday during the intraday trade. Nifty Realty Index was trading at 477.10, up 22.25 points or 4.96 % at 12:19 pm. The benchmark index, Nifty 50, was up 215.85 points or 1.23% and was trading at 17,762.50 points at the same time.
As a result of buoyancy seen in the sector, several Mumbai-based real estate companies’ stocks were also trading at or near their 52-week high levels. Godrej Properties stocks hit their yearly high of Rs 2,120, and was trading at Rs 2,093, up Rs 141.90 or 7.27%, at 12:19 pm. Oberoi Realty is eyeing its 52-week high level of Rs 824.90 and is currently trading at Rs 792, up Rs 41.30 or 5.50%. Sunteck Realty stock touched its 52-week high level of Rs 486.25 during intraday trade and, at 12.19 pm, was trading at Rs 474.75, up Rs 10.25 or 2.21%.
Apart from the festive demand, there are a couple of other factors that have given real estate stocks a push.
To start with, the number of properties registered in Mumbai, considered to be the benchmark for the real estate market in the country, have reached their highest level for the first time in the last decade, which was positive news for the industry. More than 6,000 units were registered in the first 21 days of September, surpassing the last high of 5,913 units in September 2018.
“While registrations will begin to drop with the advent of 'Shraadh’ period, even if 50-100 units are registered every day, overall registrations will reach approximately 7,000 units, which will be a record in the last decade,” according to a report by the Motilal Oswal Financial Services Limited (MOFSL). As per Hindu belief, it is inauspicious to make any new financial deal during the Shraadh period, which lasts for a fortnight.
The average daily registration in September was 300 units, up from 225 units in August. Even without specific tax breaks or stamp duty exemptions, the numbers continue to rise. As a result, this pattern can be safely extrapolated to other big cities, the MOFSL report claimed.
Godrej Properties, Macrotech, Oberoi, and Sunteck are some of the prominent listed companies with a presence in Mumbai and their stock prices have witnessed hectic activity in the past few days, according to market sources.
Godrej Properties sold apartments worth Rs 575 crore in a single day when it launched the second phase of its project, Godrej Woods, in Noida, the company said in a regulatory filing with the Bombay Stock exchange (BSE).
Another development that has increased interest in real estate stocks is the attractive mortgage rates offered by lenders. Leading lenders in the mortgage business have slashed the interest rates on properties having market values of less than Rs 45 lakh to 6.70% ahead of the forthcoming festive season. This has acted as a catalyst for pent-up demand, which was under control due to the prevailing pandemic, according to analysts.
Rohit Poddar, managing director, Poddar Housing, said, “The record-breaking sales of Mumbai real estate is going to continue and we can foresee the graph moving upwards, majorly backed by the festive season. We are confident about new registrations crossing the 10,000 mark in November as homebuyers who were in the wait-and-watch mode due to the pandemic are now walking up to the sales office.”
With the reopening of the job market, increased vaccination and signs of economic revival likely to fuel more liquidity in the hands of the common man, September is anticipated to witness decade-high sales as well, said Poddar, a Mumbai-based real estate developer.