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According to the survey, construction expenses have increased by 10% to 15%<\/strong> in most Indian real estate enterprises. Even if the cost is between 25% and 40% of the sales price. The overall impact on margins is now limited to 3 percent to 4%<\/strong>. And real estate companies have been able to easily push a price raise of 5% to 8% on a portfolio level.<\/p>\n <\/p>\n Since the start of Covid-19, affordability, increased demand for home ownership<\/strong>. And sector consolidation have opened the way for the Indian real estate sector to see robust pre-sales<\/strong> momentum once more. According to the guide, the Indian real estate industry<\/strong> is projected to witness solid demand in the foreseeable future<\/strong>. With the largest ever launch in the pipeline by most Indian real estate companies.<\/p>\n <\/p>\n Despite the fact that housing demand<\/strong> has remained stable since 2013-14. Inventory levels have witnessed a major correction, owing to a steady drop<\/strong> in new launches. According to MOFSL, unsold inventory has decreased<\/strong> to 4, 37, 000 units from a high of 7, 70, 000 units in CY13, with the overhang presently at 23 months.<\/p>\n <\/p>\n According to the MOFSL research<\/strong>, while the impact of an interest rate hike<\/strong> is project to be minor despite a recent boost of a similar magnitude. It could have a detrimental impact if rates approach 8%. In such circumstance, most developers will face a borrowing cost of 10%<\/strong> or more, which will affect their return profiles.<\/p>\n <\/p>\n In FY21\/FY22, the top 12 listed businesses<\/strong> saw a 43 percent\/45 percent YoY increase in bookings, according to the research. This should have ideally resulted in further stock re-rating. But mounting cost pressures, combined with recent interest rate hikes, have created expectations of margin erosion<\/strong> and a slowdown in demand. As a result, numerous stocks have now entered the value zone following the recent decline.<\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\n <\/p>\nPre-sales are strong.<\/span><\/h2>\n
Inventory overhang is being reduced.<\/span><\/h2>\n
Interest rate hikes have an impact.<\/span><\/h2>\n
The value of the real estate industry<\/span><\/h2>\n
![\"Inflation](\"https:\/\/navimumbaihouses.com\/blog\/wp-content\/uploads\/2022\/06\/Inflation-Overdone-According-To-A-New-Report-Real-Estate-Will-Grow-In-Near-Future-1-781x400.jpg\")
\nOn a one-year forward basis, the sector’s valuation has corrected to below its long-term average P\/E<\/strong> of 23.2x<\/strong>, and is now trading at 21.2x.<\/p>\n
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