BSE Realty Hits 4K After 11 Yrs

Sharad Agrawal, Executive Director - Capital Markets, Knight Frank India shares his perspective on BSE Realty crossing the 4K level. “The residential market turned a corner in 2021 with sales momentum consistently improving over the year. Homebuyer sentiments were not dented by concerns over the Omicron variant arising late in Q4 2021. The industry continues to consolidate with residential developments steadily shifting into the hands of stronger developers, many of which are listed, who have been able to weather the economic storm created by the pandemic. While ready inventory remains a strong preference for homebuyers, established developers with a robust execution record are increasingly finding a market for their under-construction inventory and new launches. Market continued its momentum in Q4 2021 despite concerns of the Omicron variant which ultimately had very little impact on the residential market, if at all. This is reflecting the capital markets as it also begins to look beyond the Omicron scare. In terms of half-yearly sales, H2 2021 posted the highest sales volume since H1 2016. Low interest rates, improving affordability, high savings rate during 2020 and a resurging interest in home ownership due to the space constraints imposed by the pandemic, have been the primary drivers of this revival in demand. Affordability has improved over the years across all markets with income growing and housing prices correcting. The Knight Frank Affordability Index, that tracks the EMI (Equated Monthly Instalment) to income ratio for households, improved further in 2021 across all cities. In fact, affordability has improved dramatically since 2015 as the combined impact of slowing price growth and falling interest rates was much greater in this period. The home loan interest rate is at a decadal low, aiding housing affordability”.