Market Outlook: Nifty Realty wins for the second year in a row. Can it retain the top spot in 2025?

market Outlook: Nifty Realty Index has been the top performing sectoral index of 2024, delivering impressive returns to investors and outperforming the broader market indices. This follows a remarkable growth of 81% in 2023, marking two consecutive years of strong gains for the realty sector.

This year’s exceptional performance can be attributed to strong pre-sales figures, expansion of project pipelines and strategic market expansion by real estate companies.

Realty index performance: A remarkable rally

Nifty Realty The index has gained 40 per cent on a year-to-date (YTD) basis, much higher than the Nifty 50’s 13.5 per cent gain. Over the past year, the index has gained 48 percent compared to 17 percent growth in the benchmark index.

The index reached its all-time high of 1,157.35 in June 2024 and is currently trading at 1,092.40, just 6 percent below its peak. It is up 51 per cent from its 52-week low of 722.45 recorded in December 2023.

Notably, the index delivered positive returns in eight out of 12 months in 2024, with a highest gain of 9.3 per cent in January. Despite slight declines in March, July, August and October, the index maintained its upward momentum and has gained 7 per cent so far in December.

Investor-friendly policies, including increased foreign direct investment (FDI) limits and increased transparency in deal structures, have attracted substantial global capital into India’s real estate market. Additionally, record-high pre-sale figures reported by realty firms have significantly boosted investor confidence, highlighting the strong demand in the sector. Additionally, regulatory reforms and market consolidation among developers have contributed to greater stability and long-term growth prospects, making the sector an attractive opportunity for investment.

Top Nifty Realty Index Gainers

All components except one of the Nifty Realty index delivered positive returns in 2024. raymond led with 81 percent growth, followed by Shobha (70.5 percent) and Phoenix Mills (67 percent). Other major gainers include Prestige Estates, Oberoi Realty, Godrej PropertiesAnd Brigade EnterprisesWhich each climbed between 40-50 percent. During this time, Macrotech Developers (Lodha) and DLF Also added were 37 percent and 21 percent respectively. However, Mahindra Lifespace was the only laggard, down 6 per cent YTD.

Outlook: Can realty index remain on top?

The promising trajectory of the realty sector has attracted the attention of analysts, especially as UBS estimates a 15 per cent CAGR in residential pre-sales between FY 2024 and 2029, driven by stabilizing interest rates, favorable demographics and increased The cost is based on factors such as affordability. ,

UBS issues ‘buy’ rating Prestige Estate Projects Ltd. and DLF Ltd., citing strong execution capabilities and geographical diversification. Oberoi Realty received a ‘neutral’ rating from the global brokerage firm due to valuation concerns.

Jathin Kaithavalappil, assistant vice-president, Choice Broking, emphasized that urbanization and post-Covid recovery will further boost the residential and commercial real estate sectors.

the Indian of realty sector The exceptional performance in 2024 underlines its resilience and growth potential. According to experts, with favorable policy support, rising demand and strong pre-sales, the sector is poised for sustained growth in the coming years.

Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint. We advise investors to check with certified experts before taking any investment decision.