real estate: Realty developers likely to post record bookings in October-December led by launches: Report

real estate: Realty developers likely to post record bookings in October-December led by launches: Report


Real estate developers are likely to post record sales booking numbers in the second half of the financial year 2021-22 led by new launches as the momentum of robust response from homebuyers witnessed so far is expected to be continued during the festive October-December quarter, said an report.

The beginning of the festive season, the waning of the second Covid wave, record low mortgage rates, strong hiring and salary growth in the information technology, IT-enabled services sector has led to developers preponing many launches to August-September.

These launches have received good response from homebuyers. For instance, on Wednesday,

announced selling Rs 575 crore worth of housing inventory at phase 2 of its Noida project on the day of launch. Prestige Estates was able to sell over 800 plots spread over 1.7 million sq ft worth Rs 850 crore at its Bangalore project earlier this month.

ICICI Securities expects this momentum to be carried forward from October onwards during the festive season and sees developers to post record sales booking numbers in the second half of the financial year.

“Based on our channel checks and commentary from developers in our coverage universe, most new launches in Aug-Sep’21 have seen strong customer response with developers keeping pricing discipline with price hikes of 4-5% on a like-to-like basis in new phases of ongoing projects and record low mortgage rates of 6.5-7.0% for housing loans.,” the brokerage said.

While prices have remained stagnant over the last 5 years, ICICI Securities believes that prices may see a single digit rise over the next 2-3 years annually as inventory levels have stabilised and the Indian residential real estate market has undergone clear signs of consolidation with the market share of larger, organised developers having grown to over 24% in FY21 of tier 1 residential sales value against nearly 11% in FY17.

With an increase in input costs of 5-10% over the last 12 months, it believes there is a case for a price increase and we have already seen marginal price hikes of 2-5% by developers during April-June.

It expects listed realty developers to see continued market share gains in the next 2-3 years owing to healthy balance sheets, access to capital and many unlisted and weaker developers being shunted out of the market.



Source link

Add a Comment

Your email address will not be published.