According to a Motilal Oswal report, listed Real Estate developers are expected to gain market share as the sector’s momentum continues for at least three to four years due to an existing demand-supply balance, low inventory, favorable affordability, and gradual price hikes.

“If we take the average of pre-sales growth forecasts by various property consultants, the top 12 listed businesses are likely to record 46 percent pre-sales growth in CY23, compared to industry growth of 20 percent. DLF was the primary driver of growth, with both of its premium projects sold out in CY23. Excluding DLF, growth was 35 percent year on year, which was still much greater than industry growth, according to the brokerage’s analysis.

Over the calendar years 2019-2023, listed real estate businesses exceeded sector growth in terms of bookings by 1.4 times, resulting in a constant increase in their market share to 16.5 percent from 12 percent, the report stated.

According to the report, the majority of listed developers have a strong launch pipeline and are targeting at least two additional regions in addition to their home markets, which will result in a further increase in listed peers’ market share.

For example, Oberoi Realty’s primary market is Mumbai, but they are currently expanding into Gurugram real estate. Similarly, the SOBHA group is expanding its footprint in NCR, Hyderabad, and Pune, but its key market is Bengaluru.

Observing that the affordable segment’s share fell to 29 percent in CY23, it predicted that lower lending rates would lead to an increase in affordable housing demand. Furthermore, the government is anticipated to create incentives for low-cost housing, which would be a significant positive trigger, the report stated.

Absorption in the Mumbai Metropolitan Region (MMR) and Pune has eclipsed the previous cycle’s high, with 87,000 and 49,000 units, respectively. Despite a robust commercial cycle in CY15-19, markets such as Bengaluru and Chennai have yet to reach their full potential. According to the brokerage business, as supply in Noida improves, demand in the National Capital Region (NCR) would increase further.

The analysis predicted that on the macro level, an increase in per capita income exceeding $3,500 ($2,400 as of CY23) would be a primary driver of the growth in homeownership witnessed in China between CY2008 and CY2015. These variables might lead to a sustained increase in demand over the next three to four years.

“Inventory is yet to witness a significant increase, but prices have climbed by 14 percent on an absolute basis over the last two years, compared to 25-70 percent in the last two cycles, indicating that the sector is in the midst of an upcycle. “We believe that the current demand-supply balance, low inventory, favorable affordability, and gradual price increases will keep the momentum going for at least three to four years,” the research stated.

The United Nations predicts that more than 400 million people will live in Indian cities by 2030. Rising incomes, favorable affordability, and rising urbanization will continue to drive housing demand in urban and metropolitan areas, according to the research.

Connect with us at Urban Plus for best deals in Gurugram Real Estate.

Source : Money Control