Real estate has been one of the best performing sectors and, over the past year, it has generated absolute returns of over 63 percent, outperforming several other sectors as well as the benchmark Nifty50 index which is appreciated by 27.5 percent.

The real estate index includes all major real estate developers including Godrej Properties, Lodha, DLFand Prestige Estates, all of which are growing into pan-India players.

Company stocks have appreciated between 43 percent and more than two times, as e.g. Prestige Estates And Sobha stocks, which have doubled over the past year. Actions like that of Oberoi Real Estate And Properties of Godrej grew by more than 70 percent during the period under review, and Brigade Enterprises grew by more than 90 percent.

This increase adds to the appreciation that has already occurred since 2021, when the boom in the real estate sector really took off. The recovery in stocks and the sector reflects continued demand, particularly for housing, which is a major component of the sector.

While demand in the office sector has remained broadly stable, demand in the residential segment is more recent, dating back to the pandemic. After a slowdown of almost 10 years, residential demand is boosting the sector.

Shares of second-tier developers did even better, with Puravankara shares tripling in one year. Small players like Ajmera Real Estate, Global signatureand Max Estates saw their shares appreciate 2.2 to 2.4 times.

Although sales have seen ups and downs in certain months, on a secular basis, sales and launches by real estate developers have been on an upward trajectory, which has also fueled investor interest.

Real estate IPOs

The rally in stock prices has also encouraged hitherto unlisted players to enter the markets, and in 2024 alone, seven real estate IPOs raised ₹13,550 crore, according to Colliers data. This is a record number. In 2021, six real estate IPOs raised ₹10,840 crore.

Post-pandemic demand is captured by capital market trends. Since 2010, 47 real estate companies have entered the equity markets. More than half have registered since 2021, raising over ₹30,000 crore.