Top 10 listed realty cos see market share rise marginally in key cities in FY22

  • Motilal Oswal Financial Services is of the view that this trend is likely to accelerate further on account of a healthy launch pipeline of around 70 million square feet

Harsha Jethmalani
Published17 Jun 2022, 10:37 AM IST
Analysis by Motilal Oswal Financial Services Ltd showed that top 10 listed developers delivered 36% and 48% volume and value growth respectively in FY22.
Analysis by Motilal Oswal Financial Services Ltd showed that top 10 listed developers delivered 36% and 48% volume and value growth respectively in FY22.(Photo: Mint)

The performance of listed real estate companies in FY22 was decent backed by robust sales in the March quarter of that financial year. An analysis by Motilal Oswal Financial Services Ltd showed that top 10 listed developers delivered 36% and 48% volume and value growth respectively in FY22. This led to a marginal rise of 18% and 22% in market share in value and volume terms, respectively, in the top four cities. In FY21, these numbers stood at 17% and 20%.

The domestic brokerage house is of the view that this trend is likely to accelerate further on account of a healthy launch pipeline of around 70 million square feet (msf) as indicated by the top 10 listed developers compared to the 45msf launched in FY22. They feel an increase in the cost of capital is among the factors that would work in the favour of larger developers, aiding more market share gains.

That said, the management commentaries of leading listed residential realty developers have indicated of construction costs rising and they taking selective price hikes to combat the margin pressure. Apart from that, the Reserve Bank of India's rate-hiking spree is a sentiment dampener for the sector as it will result in costlier home loan rates.

An analysis published by property consulting firm Knight Frank India showed that home loan rates are still approximately 150 basis points (bps) below those prevailing in 2019 and a reversion to those levels will result in an 11.73% increase in the EMI load for the homebuyer and an effective 3.38% decrease in affordability basis the Knight Frank Affordability Index. One basis point is 0.01%. Note that this analysis does not account for change in income levels or house prices and considers interest rates as the only variable.

In a note published on 13 June, Knight Frank India said that strong residential sales in calendar year 2021 were mainly aided by low interest rates on home loans.

"However, sharp rise in inflation has forced the central bank to raise interest rates and suck out excess liquidity in the market. While it is a critical tool in the fight against the burgeoning inflation, this turn in the interest rate cycle could be a significant headwind to real estate demand," it said.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.MoreLess
First Published:17 Jun 2022, 10:37 AM IST
HomeMarketsMark To MarketTop 10 listed realty cos see market share rise marginally in key cities in FY22

Most Active Stocks

Tata Steel

157.75
03:43 PM | 19 JUL 2024
-8.6 (-5.17%)

Tata Power

414.15
03:59 PM | 19 JUL 2024
-15.85 (-3.69%)

Bharat Electronics

306.30
03:45 PM | 19 JUL 2024
-7.2 (-2.3%)

Zee Entertainment Enterprises

137.55
03:57 PM | 19 JUL 2024
-4.9 (-3.44%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Tata Teleservices Maharashtra

102.11
03:59 PM | 19 JUL 2024
4.68 (4.8%)

Rail Vikas Nigam

614.00
03:59 PM | 19 JUL 2024
27.65 (4.72%)

Jubilant Pharmova

752.25
03:43 PM | 19 JUL 2024
25.3 (3.48%)

One 97 Communications

458.70
03:55 PM | 19 JUL 2024
13.65 (3.07%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    76,272.001,173.00
    Chennai
    76,124.001,465.00
    Delhi
    75,533.001,021.00
    Kolkata
    75,089.00-450.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    102.86/L0.00
    Chennai
    100.76/L0.00
    Kolkata
    104.95/L0.00
    New Delhi
    94.72/L0.00
    OPEN IN APP
    HomeMarketsPremiumInstant LoanBudget