Real Estate Shares Growth In 2024
Real estate is one of the fastest-growing sectors in India. It is expected to surpass all the other major sectors to become the king in the country's capital generation and the primary contributor to infrastructural development by 2029.
Residential real estate is the best contributor
The housing sector in real estate has contributed significantly to the country's economy. The demand for affordable and luxury housing has been increasing rapidly after COVID-19 and is expected to reach 682.7 billion in 2029 from 227 billion in 2024. Apart from these, the government's schemes and initiatives are also significantly contributing to the growth of this sector. In the recent statement made by our honourable finance minister, Nirmala Sitharaman ensured the allocation of 79000 cores in 2024 from 48000 crores in 2023. This significant growth in India's infrastructure budget shows the government's commitment to the country's growth.
Commercial real estate growth
India's Commercial Real Estate market is poised to reach a remarkable value of INR 547000 by 2024, showcasing immense growth potential within the country's real estate sector and real estate shares. This projection indicates a promising compound annual growth rate (CAGR 2024-2028) of 11.19%, leading to a substantial market volume of INR 836000 trillion by 2028. Despite this impressive growth, the United States is anticipated to dominate the global Real Estate market, with a projected value of US$25.37 trillion by 2024, highlighting its significant scale and influence in the sector. However, India's commercial real estate market is experiencing a surge in demand, fueled by strong economic growth and increasing foreign investment. This indicates favourable opportunities for investors, and developers alike as India's market continues to expand and evolve.
These stats show the significant and sustainable growth in the real estate fraternity, and these factors are pushing this sector's shares to move up rapidly with ease and providing great opportunities for investors to cultivate huge sums of money with these real estate shares. These factors are uplifting the price of real estate shares in 2024.
Regarding our topic, which real estate share is booming, I will talk about some top stocks and reasons for the overall real estate growth.
In the first week of 2024, top real estate companies' shares continued their rally from 2023, with gains of around 30%. This surge was driven by strong pre-sales reported by major players in the sector. The S&P BSE Real Estate index climbed more than 8% weekly, reaching a 15-year high of 6820.59 points. Companies like Godrej Properties, The Phoenix Mills, Prestige Estates Projects, and Sobha saw gains ranging from 11% to 30%, while Mahindra Lifespace Developers, Oberoi Realty, and Macrotech Developers added 6% to 8%. Sobha reported a significant increase in total sales for the December quarter, with a 37% year-on-year rise to Rs 1,952 crore.
The shares of these top real estate companies reflect this sector's immense growth and potential.
Analysts anticipate continued growth in luxury real estate projects due to the increasing spending power of the Indian upper middle class. Additionally, affordable real estate is expected to increase as interest rates decrease and the rural economy improves. Inventory levels in NCR and Bengaluru remain low, with strong demand for new market launches. Jefferies expects a significant portion of its FY24 forecast to be met, given the pre-sales trend in Q3. Despite the strong performance of the realty sector in 2023, some stocks are trading above their long-term averages.
Stocks like Anant Raj, DB Realty, Prestige Estates, Puravankara Ltd, Peninsula Land, and Unitech provided multi-bagger returns in 2023, contributing to the sector's robust performance.
Conclusion
As said above, real estate is India's fastest and most sustainable growing sector. India, as a newly industrialised country, is spending a huge amount on its infrastructure growth, and as a growing economy, the spending power of our people is growing too, so the demand for houses and different real estate is increasing drastically, and this is what is causing real estate share to have bullish sentiment.
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