Kotak Mahindra AMC continues to remain positive on real estate stocks, Nilesh Shah, managing director, told CNBC-TV18. Shah also said that low-interest rates and lower inventory levels are clear positives for the real estate sector.
“We are bullish on home improvement, thanks to the primary and secondary real estate activity. Now, that is partially reflected into the real estate sector in recent times,” Shah said.
“The sector has witnessed a big amount of churn, excess inventories are getting over, prices have started moving up, work from home environment has created demand. With Real Estate Regulatory Authority (RERA), only quality players are remaining and home interest loans are available at 6.5 percent including from our own bank, Kotak Mahindra Bank, put all these things together, the real estate sector starts moving up from mid-single-digit contribution to gross domestic product (GDP) to double-digit contribution to GDP over the next 3-4-5 years. It looks quite plausible and that is reflected into the real estate sector,” he said.
Meanwhile, in an interview to CNBC-TV18 on September 24, Aditya Narain, head of research-institutional equities at Edelweiss Securities, said, “Consolidation (in real estate space) trend has been on for a reasonable length of time, and you might start seeing the early signs of price. So, to some extent, this is a shift that's going to happen, but whether one would follow through to the stock performances seen over the last couple of days, I would wait off a bit on that. But directionally, you are in the right space. The risks would lie in terms of the market over extrapolating the pace of this demand or the price that people might be factoring in.”
Also, Keki Mistry, vice chairman and managing director of HDFC Ltd, on September 27, said that a significant portion of housing demand is coming from first-time buyers. “A very significant portion of demand continues to be from first-time homebuyers. From 2017 right up to 2020, the demand for housing was largely coming out of the tier-two, tier-three towns or in the outskirts of the big cities, but not that much in the center of a big city like Mumbai or Delhi or Bangalore. However, what has happened in the last, probably one year is that people even in cities like Mumbai, Delhi and Bangalore are also buying houses,” Mistry said.