BSE Realty index was the top sectoral gainer, as it advanced 4.2 per cent. The index has risen 10.8 per cent over the last one month, outpacing Sensex which logged 4.1 per cent gain in the same period.
In Tuesday’s trade, stocks such as Sobha, Sunteck Realty, IndiaBulls Real Estate rose 8.1 per cent, 7.7 per cent and 7.5 per cent respectively. Only one constituent of the BSE Realty index – Brigade Enterprises closed in the red.
“The consensus view emerging in the market is that Covid-led stress will lead to a faster consolidation in the real estate industry. A lot of marginal and weaker players will get weeded out, and the stronger players will emerge stronger,” said Gaurav Dua, senior vice-president and head of capital market strategy & investments at Sharekhan by BNP Paribas.
Dua pointed that if the scenario materializes, these players will also be able to lap the existing assets at attractive prices, and the outlook for the medium term for some established players is positive.
He also pointed that the recovery was visible on a sequential note, as the nation walks a few steps after a stringent lockdown, and the battering down of the stocks had made the valuations ripe enough for the stocks to be lapped up.
“The registrations for last month for Mumbai and certain large towns, the numbers are seeing a strong recovery on a month-on-month basis. The activity is resuming, slowly but steadily. Also, the valuations are quite juicy to pick them up,” said Dua.
Property registration activity in Mumbai, the country’s most expensive real estate market, has picked up in July bouncing back from the activity witnessed in April-June quarter. While collections from real estate activities are improving, it still remains below the pre-Covid19 level.
Total number of documents registered in July stood at 21,311 in Mumbai. Out of this, e-registration of leave and license ranked the highest at 12,188 deeds fetching Rs 1.89 crore stamp duty, while the maximum revenue was fetched through registration of sale deeds that stood at Rs 214 crore.
There are efforts being made to ensure the sector gets back on its feet.
Top lender State Bank of India (SBI) will be addressing the media on Wednesday to showcase its plan to breathe life back into the Bangalore real estate market.
However, many believe the situation was not going to return to pre-Covid times anytime soon for the realty sector.
“Construction, real estate, hotel, travel tourism may continue to feel the pain. I don’t know when they will come back. Besides, massive balance sheet restructuring might be required in the financial space,” veteran banker K V Kamath said on Friday.