Indian real estate stocks have shown signs of resilience in recent times, with the sectoral index outperforming the Sensex on more than one occasion.
In the first nine months of this year, the S&P BSE Realty index gained around 15.6 percent compared to a 7.6 percent rise on the Sensex. The local real estate gauge also managed to beat the MSCI Emerging Market Real Estate index, which climbed 3.1 percent, year-to-date.
Stocks that have done well during this period include the likes of Indiabulls Real Estate (+34 percent), NBCC India (+32.2 percent), DLF (+32.7 percent) and Omaxe (+27 percent).
So what’s caught investor fancy?
Analysts say a combination of reform-based initiatives by the government, like the Real Estate Bill passed in March, and prospects of easing interest rate has stoked investor appetite for real estate shares.
Since the Reserve Bank of India reduced key interest rates last week, the real estate index climbed just over 4 percent, against a rise of 0.7 percent on the Sensex.