Luxury Housing Boom Drives Surge in Indian Real Estate Stocks
Luxury Housing Demand Fuels Rally in Indian Real Estate Stocks India’s real estate sector is experiencing a robust rally, propelled by surging demand for luxury housing and record-high residential pre-sales. The real estate index has climbed over 25% since its April low, positioning the sector to outperform the benchmark Nifty 50 Index for the fifth consecutive month in July. This strong performance marks a notable rebound following earlier concerns about economic slowdown that triggered a sell-off earlier in the year.According to a July 7 report by Kotak Institutional Equities, developers are expected to report record pre-sales of ₹447 billion (approximately $5.2 billion) in Q1. The positive sentiment is further supported by high-profile upcoming launches from leading developers such as DLF Ltd., Prestige Estates Projects Ltd., and Lodha Developers Ltd. JPMorgan analyst Harsh Wardhan Modi noted, “Tier-1 developers with strong balance sheets and diversified portfolios are likely to benefit from India’s long-term structural housing demand.” DLF recently reported luxury home sales worth ₹110 billion within just a week of launch in June, while Prestige Estates achieved its highest-ever quarterly sales bookings. Although both companies' shares are still down year-to-date, they have rebounded over 35% since their April lows.HSBC analysts, including Puneet Gulati, highlighted that many developers have less than a year of unsold inventory and maintain strong financial positions, which gives them both pricing power and long-term resilience. However, some concerns remain. Rapid new project launches have raised fears of potential oversupply, prompting questions about whether the property cycle may have peaked. As a result, certain investors are adopting a cautious approach. All eyes are now on the upcoming earnings season later this month. Key indicators to watch include potential upward revisions in pre-sales and cash collection guidance for FY26, as noted by analysts at Citigroup.
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