The real estate shares have recovered. But how substantial this recovery is? Especially after the second wave of COVID. Was there a dip in the demand after the second wave? Or is it still going strong on the demand side? Senior Producer and News Anchor Mansi Dave uncovers the layers of these questions one by one.  

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She said that the CITI has shared a report where there are few observations and few concerns on the same. Talking about the observations first, she said: “We are continuously saying that the real estate sector is performing well. It has registered good results but we can clearly see that the second wave of the COVID has affected the demand of the realty sector.” 

If you will compare the results of the Q4 FY21 with the Q1 FY22, then you will clearly see the demand has been affected due to the second wave of the COVID. In Q4 FY21, there was a recovery but in Q1 FY22, the sector has witnessed pain, she added.  

Dave said that despite all this, the absorption rate or the property registration rates have seen a surge, which is a positive sign. In the June quarter results, a growth of 66 per cent was witnessed in the residential property absorption rate. “Also, if we talk about the June month only then the Mumbai property registration has recorded a 47 per cent growth. And the overall Maharashtra property registration has posted a growth of 118 per cent,” she said.  

Dave added that there was an upward correction in the commercial launches, as per the weak base on a yearly basis. But again, on the quarterly level, there is still a concern here. There were other concerns too as per the CITI report. In Q1 FY22, there was a decline of 62 per cent in the residential pre-sales.     

She further added that this is because of the second wave of the COVID that on the quarterly basis, there was a dip of 47 per cent in the new launches. Despite all these figures, the outlook is positive. With affordability, deduction in the interest rate, and growth in demand, consumer sentiments are improving continuously. This will have a positive impact.

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The CITI bets big on Phoenix Mills stocks. It has also advised buying Shobha Reality and Oberoi Reality. These details are mentioned in the CITI report. The outlook of real estate is positive!