Morgan Stanley’s Top Real Estate Bets As Recovery Becomes ‘Entrenched’
The property upcycle is here to stay, provided "pricing remains disciplined", Morgan Stanley says.
Real estate recovery across India’s top seven cities is becoming “entrenched”, according to Morgan Stanley.
Pre-sales and new launches for Q4 of 2021 were the highest in the last five to six years, exceeding pre-Covid levels for the first time, the financial services provider said in a March 14 report. “This can continue for a while if pricing remains disciplined.”
Residential demand, it said, is strong in both affordable and premium segments, driven largely by better affordability, cycle-low mortgage rates, trailing five to six years of low volumes, wealth effect and upgrade requirement.
Price increases/discount removals have begun across cities and developers, the report said. In commercial, vacancies are peaking in the mid-teens, which should drop in the second half of 2022 with new leasing, “driven by solid employee/business expansion for MNC tenants”.
In the residential segment, new launches rose 40% quarter-on-quarter to 44,500 units. That compares with the six-quarter average of about 28,700 units, and is driven by Bengaluru, Kolkata, Gurugram, Pune and Chennai, according to the report. New sales rose 41% to around 41,200 units, driven by growth across all cities.
