HSBC, in its latest note, underscores the resilience of the Indian real estate sector, dispelling concerns of weak demand and highlighting a strong growth trajectory. The brokerage has issued ‘Buy’ recommendations for Godrej Properties, DLF, Sobha Developers, and Prestige Estates, while maintaining a ‘Hold’ on Oberoi Realty. This endorsement comes as the BSE Real Estate Index surged by 1.5% in early trade on November 27, signaling investor confidence in the sector.

Demand Dynamics & Market Outlook
HSBC attributes the sluggish bookings during the second quarter to inventory shortages rather than a decline in demand, emphasizing the need for accelerated project approvals and fresh land acquisitions to meet the FY25 growth guidance. A robust demand pipeline is expected to sustain momentum, supported by macroeconomic stability and a positive housing cycle that began in late 2020.

Real estate developers are aligning their strategies to capture this demand. Godrej Properties recently announced plans to raise ₹4,000 crore through a Qualified Institutional Placement (QIP), aimed at funding its growth ambitions and land acquisitions. Similarly, Macrotech Developers (Lodha Group) reported improving sentiments for FY26, forecasting sustained GDP growth of 7% or more.

Shift in Market Preferences
Macrotech also indicated a shift in focus from entry-level housing to premium segments, with plans to balance its portfolio by achieving a 50% mix of mid-income and high-end housing sales over the next three years. This reflects a broader trend, as affluent Indian entrepreneurs are increasingly investing in premium real estate. According to HSBC’s Global Entrepreneurial Wealth Report, 61% of wealthy Indian entrepreneurs allocate personal wealth to real estate, significantly higher than global peers.

Real Estate Price Trends
Despite challenges like the inauspicious Shraadh period and state elections, housing prices across India’s top seven cities, including Delhi and Mumbai, surged. An ANAROCK report revealed a 23% year-on-year increase in average home prices, reaching ₹1.23 crore during April-September 2024. This price growth underscores the strong appetite for housing across the luxury and mid-income segments.

Industry Insights
While some developers, including Macrotech, downplayed the short-term impact of elections on market sentiment, HSBC remains optimistic about the long-term potential of India’s real estate sector. The note highlights that project approvals and strategic land acquisitions will be crucial to sustaining growth.

Investor Confidence Remains High
The sector has also witnessed heightened activity in capital markets, with multiple developers raising funds to fuel expansion. Godrej Properties’ ₹4,000 crore QIP is the latest example of this trend, reflecting strong investor confidence in the growth potential of India’s housing market.

With demand indicators pointing upward and favorable macroeconomic conditions, India’s real estate sector is poised for sustained growth, offering compelling opportunities for developers and investors alike.

Related Project -

https://www.luxuryresidences.in/dlf-camellias-sector-42-gurgaon/
https://www.luxuryresidences.in/dlf-the-crest-dlf-phase-5-gurgaon/
https://www.luxuryresidences.in/godrej-meridien-sector-106-gurgaon/