Is The Real Estate Rally Sustainable?
Ninad RamdasiCategories: DSIJ_Magazine_Web, DSIJMagazine_App, Editorial, Letter to Editor, Letter to Editor
The insights offered in the latest edition regarding potential stock investments in 2024 were quite valuable. Given the ongoing optimism in the real estate sector, I’m keen to understand whether this rally is likely to be sustainable, especially if I’m considering investing in real estate stocks at this juncture. - Chinmay Joshi
Editor Responds: We appreciate your kind words of encouragement. Real estate stocks have been on an uninterrupted and robust uptrend, with the sectoral index, BSE Realty, soaring over 60 per cent in the last 6 months. The rally is evidenced by the optimism surrounding the industry, driven by government emphasis and initiatives to boost the sector, along with strong demand reflected in presales figures. Housing sales in the top 7 cities reached the highest peak in a decade, marking an impressive 31 per cent y-o-y growth.
Additionally, the expansion of alternative asset classes, including logistics, warehousing, holiday homes, student housing, and data centres, played a crucial role in fueling the overall sectoral growth. Considering these growth triggers are expected to persist shortly, the real estate sector is poised for robust growth. Nevertheless, it’s crucial to consider the company’s financials, historical performance, future strategies, and stock valuation before arriving at any investment decisions.