BSE Realty Index Clocks 204% Growth Amid COVID-19, Outperforms Other Sectoral Indices
Real estate stocks have given more returns than other stocks despite the ongoing Covid time. The S&P BSE Realty Index, an indicator of real estate companies’ performance on the bourses, grew 204% between 1 April 2020 to 12 January 2022, surpassing all sectoral indices’ returns as well as outperforming the broader market, an analysis by ANAROCK has said.
As per ANAROCK Research, the market share of listed developers is rising, with their sales share of overall residential area sold across the top cities tripling from 6% in FY17 to 18% by H1 FY22.
Anuj Puri, Chairman – ANAROCK Group, says “The S&P BSE Realty Index, an indicator of real estate companies’ performance on the bourses, grew 204% between 1st Apr 2020 to 12th Jan 2022, surpassing all sectoral indices’ returns as well as outperforming the broader market. Several unique developments helped boost real estate demand to such an extent that the Realty Index outperformed the other sectors as well as the broader market.”
Indian Stock Market
The Indian bourses have been remarkably resilient since the pandemic outbreak. After an initial decline in activity, the Indian stock markets saw considerable liquidity infusions, leading to notably high returns on many stock categories. S&P BSE Sensex, the broad indicator of the stock market performance, once again crossed the 61,000 mark on 12th Jan 2022 and is 2.2X of 1st Apr 2020 - registering a 116% growth.
Moreover, S&P BSE Consumer Durables Index, S&P BSE Consumer Discretionary Goods & Services Index, and S&P BSE Auto Index grew 138%, 140%, and 149%, respectively between 1st Apr 2020 to 12th Jan 2022. And there’s more.
Anuj Puri, Chairman – ANAROCK Group, says “The S&P BSE Realty Index, an indicator of real estate companies’ performance on the bourses, grew 204% between 1st Apr 2020 to 12th Jan 2022, surpassing all sectoral indices’ returns as well as outperforming the broader market. Several unique developments helped boost real estate demand to such an extent that the Realty Index outperformed the other sectors as well as the broader market.”
Factors that drove residential demand
Real estate buyers increasingly patronize large, reputed developers, and are willing to bear the implied premium or extra cost
Homeownership went from choice to necessity in a pandemic that required people to spend unprecedented lengths of time at home. Restrictions imposed by housing societies on tenants’ movement also boosted the demand for ownership homes
Volatility in the prices of physical assets was negligible when compared to other investment avenues, increasing the popularity of real estate as an investment asset class
Interest rates were at a decadal low, bringing mortgage costs down significantly
Structural changes have improved the perception of the Indian real estate sector as more organized and dependable than it was half a decade ago
NRIs are once again very active on the Indian residential real estate market
