The depressed real estate market is proving to be a boon for organised developers, which have continued to grow and gain market share although the broader market has been shrinking, said a Kotak Institutional Equities report.
“Like in past cycles, a slowing market has resulted in unorganised developers/new entrants either exiting the market or scaling down,” Economic Times quoted real estate analyst Samar Sarda as saying.
“At the same time, organised developers try to increase market share by launching more projects (most now concentrating on large projects only)/acquiring land parcels,” said Sarda of Kotak Institutional Equities Research said in his report.
Even as news about the market has remained dull for some time now, big launches are lined up in the second half of the current fiscal, he said. “Recent correction in stocks affirms our positive stance on the sector.”
While home sales are still much lower than at the peak, there is a decline in unsold under-construction inventory as not much new supply has come into the market in the past four quarters.
The organised developers recorded a 14 per cent sequential growth in sales value during the three-month period compared to a year ago, with Godrej leading the pack, followed by HDIL and developers in Bengaluru.
All Bengaluru-based developers sold more area during the quarter, compared to the preceding three-month period, it said, while pointing out that sales trend remains weak for Prestige and Puravankara.