Real Estate Bounces Back
Real Estate Bounces Back According to an analysis done by Anuj Puri, Chairman, ANAROCK Group, the top nine listed developers have posted 57 per cent year-on-year growth in sales booking revenue in H1FY22.
Continuing to reap dividends from the post-pandemic surge in demand for branded homes, the top nine stock exchange-listed developers raked in Rs 14,883 crore of revenue bookings in H1FY22 – a sharp uptick from Rs 9,483 crore in the same period of the previous fiscal. Even as the second wave of the pandemic wreaked economic havoc during Q1FY22, these players effectively clocked 57 per cent annual growth in their overall residential booking revenues in H1FY22. In terms of area, these nine listed developers sold approximately 18.46 million sq. feet of housing space in H1FY22, again in remarkable contrast to approximately 13.28 million sq. feet in the corresponding period a year ago.
Amounting to an annual growth of 39 per cent, the total residential area sold in H1FY22 has also surpassed that of the corresponding pre-pandemic H1FY20 period when approximately 17.2 million sq. feet area was sold. The top listed developers analysed are Sobha Ltd., Puravankara Ltd., Prestige Estates, Brigade Enterprises Ltd., Mahindra LifeSpaces Developers Ltd., Godrej Properties Ltd., Oberoi Realty Ltd., Kolte-Patil Developers and Macrotech Developers (previously Lodha Group). ANAROCK has collated data as per investor presentations of each of the companies.
Driven by homebuyers’ increasing preference for branded homes, the listed developers have once again outperformed the market. Notably, these players have also reconfigured their supply pipeline to deliver projects in the affordable, midsegment and premium segments. The ongoing low interest rate regime and homebuyers’ desire to avoid construction-related risks also played a role. Less than a decade ago, a largely speculator-driven housing market saw unnatural demand chasing the wrong kind of supply. Today, these players are unleashing right-priced, right-sized supply, clearly aimed at organic end-user demand. This is the result of intensive market research before pressing the ‘commit’ button and is one of the most notable features of the reinvented Indian housing market.
Quarterly Trends As expected, during H1FY22, the residential market’s second quarter performance was significantly better than the first. For the Indian economy at large, the second pandemic wave in April and May of this fiscal year was far more devastating than the first wave in 2020 that had a major dampening impact on residential activity. Nevertheless, in terms of activity, the second wave quarter fared slightly better than the first.
Performance Highlights The top nine listed players collectively sold homes worth Rs 10,669 crore in Q2 of FY22 (July to September). Their booking revenue in this given quarter rose by a staggering 89 per cent against the same period in the last fiscal (Q2FY21) when it was Rs 5,645 crore. The total area sold by these developers in Q2FY22 also saw an 83 per cent growth – from approximately 7.38 million sq. feet in Q2FY21 to nearly 13.47 million sq. feet in Q2FY22.
As for the first quarter of FY22 when the second pandemic wave was at its worst, the top nine listed players sold approximately 4.99 million sq. feet while a year ago in Q1FY21 the area sold was more at 5.9 million sq. feet. In the first quarter of FY22 the total area sold by these developers saw a yearly drop of 15 per cent compared to Q1FY21; their booking revenue was 10 per cent more than the preceding period – approximately Rs 4,214 crore in Q1FY22 against Rs 3,838 crore in Q1FY21. This may indicate higher sales in the mid to premium categories.
