Friday, February 23rd, 2024

Not property! Stocks of real estate companies made investors rich, wealth increased so many times in 3 years


Photo:FILE real estate

usually Investors invest in property. The reason for this is that investing in property is considered safe and gives better returns. But you will be surprised to know that investors investing in the stocks of real estate companies have got many times better returns as compared to properties. Let us tell you that after strong sales and RBI’s ban on rate hike, the realty index is 89 percent above the low of March 2019. That means, if you had invested Rs 1 lakh in 2019, it would have become Rs 1.89 lakh today. Had it been Rs 10 lakh, it would have been around Rs 19 lakh. Sector valuations (PBX) are now near their 2021 peak, reducing rerating headroom, foreign brokerages said in a report, Jefferies said.

Shares at highest level in almost 15 years


 

However, with property stocks at their highest level in nearly 15 years, there is little room for error, the report said. It said sector valuations reached peak levels in 2021 following RBI’s rate freeze in March 2023. Customer feedback means an upgrade to pre-sale estimates is still possible. Due to the surge in the festive season, sales have increased by 20 percent year-on-year to more than 50,000 units in October 2023 in the top-7 cities. Inventory levels are still declining, and pricing is strong.

Boom due to record sale of houses in the country

Strong performance in Q2 has driven sales of our 10-listed developer sample up by plus 35 per cent in 1H. With a strong launch in November 2023, we believe a record third quarter is likely. Our analysis of Prophequity’s data for October 2023 shows that a strong third quarter has got off to a good start following a record second quarter. YoY presales plus 25 per cent by volume in top-7 cities, with 10 per cent yoy blended pricing gains.

Input: IANS

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