Popular YouTuber Akshat Shrivastava on Friday stated the 26 percent year-on-year decline in housing sales in the country's top eight cities during the fourth quarter of 2024. Despite this downturn, Shrivastava emphasized that investors should not lose hope.
Real estate experts have attributed the decrease in sales figures to factors such as the assembly elections in Maharashtra and Haryana in October and November, as well as high property prices. It is important for investors to remain optimistic and consider the prospects for growth in the real estate market.
Shrivastava attributed the decline in the real estate market to a comparison with the small cap Index. He pointed out that the decrease in real estate prices mirrored the trend seen in the small cap Index, with housing sales falling by 26% after experiencing a significant rise of 50-100% the previous year. This similarity was also observed in the small cap index, which surged by 100% in a year before starting to decline.
"Housing sales dropped by 26% because it went up by 50-100% the year before that. Very similar to: Small cap Index, which went up by 100% in 1 year. And, is now falling. This does not indicate: that the real estate market is dead. In fact: good real estate like good stocks, will have massive demand," Shrivastava said.
Earlier this week, the Nifty Smallcap 100 index fell by 4% to 16,912.90, marking its lowest point since mid-June 2024. Over the past seven trading sessions, including today, the index has remained in negative territory for six of them, resulting in an overall decline of 11.4% from its peak in January at 19,224. Additionally, the recent drop has led to a correction of 13.6% from its all-time high of 19,716 on December 12.
The recent decline in small-cap stocks is due to worries that Q3FY25 may bring another quarter of subdued performance for Indian companies. This, combined with a slowdown in capital expenditure growth, has impacted small-cap firms the most as they usually benefit the most from an increase in capex. Concerns about a decrease in earnings and high valuations continue to worry investors, leading to a significant sell-off in this sector.
Based on Trendlyne data, 80 stocks in the Nifty Smallcap 100 basket are currently experiencing declines of 20% to 55% from their 1-year highs, placing them in bear territory. A stock is considered to be in a bear grip when its value decreases by 20% or more.
Real estate
A survey conducted by PropTiger.com, a digital real estate transaction and advisory platform, covered Delhi NCR, Mumbai Metropolitan Region (MMR), Pune, Kolkata, Ahmedabad, Hyderabad, Bengaluru, and Chennai. The data revealed that Delhi NCR was the only region among the top cities to witness a positive growth in new home sales, with 9,808 units sold in Q4, up from 6,528 units in the same period last year.
The Mumbai Metropolitan Region (MMR) maintained its status as the top market leader, with a total of 33,617 units sold. Although this figure represents a 31% year-on-year decrease from the 48,553 units sold in the same period in 2023. Following closely behind is Pune, with 18,240 units sold, also experiencing a 31% year-on-year decline.
In the Southern region, Bengaluru witnessed a decrease of 23 percent Year-over-Year (YoY) with 13,236 units sold, while Hyderabad saw a 36 percent YoY decrease with 13,179 units sold, and Chennai experienced a 5 percent YoY decrease with 4,073 units sold. Kolkata sold only 3,715 homes in Q4 2024, which is a 22 percent YoY decrease from the 4,735 units sold in Q4 2023. Ahmedabad also saw a decrease of 34 percent YoY with 10,170 units sold in Q4 2024.