IT hiring, jump in salary levels to boost real estate sector in top cities. Stocks to bet on

Real estate stocks have been booming since recent sessions amid improved prospects and expectations from publicly traded companies emerging as beneficiaries as record-low interest rates and an economic recovery from the Covid pandemic fuel demand from an increasingly affluent middle class.

The BSE Realty Index is up nearly 10% in the last five sessions and has increased over 35% this year (to date). The Nifty Realty Index has seen 10 years of consolidation and there are many positive triggers for the sector to outperform, analysts say.

Low interest rates, government support and the consolidation of the sector after Rera act as important catalysts for a trend reversal in this sector. In addition, market watchers also expect the issue of development, IT hiring, and salary increases to act as triggers for living space.

“The IT sector is experiencing strong growth dynamics, creating new jobs in the economy, while wages in this sector are also rising. The rise in salary levels, work out of culture, and other tailwinds discussed above are all contributing to a turnaround in living space. The economy is experiencing a strong recovery and the subject of development is gaining momentum while the work out of culture cannot last forever. So I believe commercial real estate will also gain momentum sooner or later, “said Santosh Meena, Head of Research, Swastika Investmart.

Analysts believe the upward momentum in real estate is just the beginning of a new bull run after a decade of underperformance. Listed providers have gained market share in new launches over the past 2-3 years and the trend is expected to continue given expectations that the housing market will perform well in the near future.

“The majority of Sobha’s pre-sales come from the Bangalore market, one of the IT hubs in India. 10 cities in India for organized actors after Demon, RERA, IL & FS crisis, “said Yash Gupta, Equity Research Analyst at Angel Broking.

India’s real estate market is rebounding after having been in downturn for the past six years as a series of headwinds ranging from the pandemic, a bad credit crisis and a surprise cash ban in 2016 hurt demand for new homes.

“Sobha is our top choice because of its diversified portfolio and better visibility of growth,” added Santosh Meena. He believes that Bangalore-based Brigade Enterprises could also outperform due to the growth in the IT sector, while Angel Broking’s Godrej Properties, Prestige and Kolte Patil Gupta said they got the Sobha Limited purchase rating and the neutral Prospect for Godrej Properties continue.

Subscribe to something Mint newsletter

* Please enter a valid email

* Thank you for subscribing to our newsletter.

Never miss a story again! Stay connected and informed with Mint. Download our app now !!