Analysts bullish on real estate sector amid increased capex, healthy demand

Going forward, the ability of developers to show growth on a high base of FY22 sales, and management of a weak macroeconomic environment along with rising interest rates would be the key monitorables

After a decade of downtrend, rising investments within private corporates in industrial and household segments, bottoming out of prices, and sustained demand have brightened the outlook for the real estate sector.

Nominal gross fixed capital formation (GFCF) grew at a CAGR of 6.5 per cent between FY12-21, underperforming nominal GDP which grew at a CAGR of 9.5 per cent over the same period, data by the national accounts statistics 2022 shows. While the household sector and private corporates contributed 74 per cent to GFCF in FY21, it was down by 500 basis points (from 79 per cent) since FY12. 

Moreover, contribution of