"We're just 2-3 years into an 8-year Real Estate Cycle" | How to Analyze Real Estate Stocks?
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- เผยแพร่เมื่อ 6 มิ.ย. 2024
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The Indian real estate industry is experiencing unprecedented growth, marked by a surge in property launches across the top 7 cities in 2023. Companies like DLF, Prestige, Sobha, Godrej Properties, Oberoi Realty, Macrotech (Lodha Developers), Ashiana Housing and others are at the forefront of this expansion, with robust sales and strategic initiatives driving market momentum. In this video, we shall examine the real estate industry in greater details as we look at the structural variables, the complexities, macroeconomic factors, RERA and much more. Real estate stocks have been on an upswing over the past 2 years and with increased project launches, reduced unsold inventory and rising consumer confidence, this trend is likely to continued for another 3 to 4 years. Ergo, we'll also examine the metrics and variables one needs to look for when evaluating real estate companies
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👉 Video Chapters:
00:00 India's Real Estate Market
01:13 Highly Fragmented
02:02 Inherently Cyclical
04:42 Capital Intensive
05:41 Large Size of Operations
06:19 Brand & Market Position
07:21 Diversification
08:18 Risks
10:06 Area Constructed & Bookings
11:23 Collections
12:57 Advances
14:35 Sales Potential & Launches
15:59 Debt Levels
16:41 Shankar's Viewpoint
👉 Additional Reading/Resources
▸ Real Estate Industry Analysis by Dr. Vijay Malik: www.drvijaymalik.com/real-est...
▸ TH-cam video by Scientific Investing: • Real Estate Sector Ana...
#realestatesector #realestatestocks #dlf #prestige #sobhacity #godrejproperties #oberoirealty #lodha #macrotech
Disclaimer: I am not a SEBI registered investment advisor or research analyst. I am not registered with PFRDA or IRDA either. The content posted on this platform is purely for educational purposes and none of it constitutes investing or trading advice. Viewers should do their own research and diligence before investing or acting on the information presented. Some of the links I have posted in the video, the description, the comments and other related resources might be affiliate links
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I like Your style of saying *Let's begin* and a miniature Shankar jumping out to request people for a like 😊
Thank you so much! It took a little inspiration (from the Primal Video channel), two green screens and a smart editor to create this
He is the best youtuber in terms of quality of content
Thank you
For sure. His video on momentum investing got me going.
I haven't missed any videos ever since.
No doubt about it
Why there are no substack articles anymore :(
As a developer.. this was near perfect analysis.. good job
Thank you very much 🙌
Great insight as always Shankar. Kudos!!!
Much appreciated! 🙌
Your have collected information very precisely and near to actual , thanks this
Most welcome. I'm gald you like my work
Thank you sir
Amazing video next video on automobile sector analysis
Thanks for the suggestion
Great Insights Shankar, Thanks for sharing
My pleasure!
Hi Shankar - From a consumer's (apartment owners') perspective, is the current real estate boom the best period for undertaking any redevelopment projects to get the best deal from real estate companies or should we wait for the downturn? Though not completely related, will be good to know your perspective.
Hello. I've never thought of something like this so all this is guesswork on my part & I can be completely wrong. Redevelopment projects are multi-year projects so I'm thinking the timing is not something that the builder will be looking at. Plus, for the apartment owners, it shouldn't really matter as they would be reoccupying the flats once its rebuilt. I'm guessing its the builder who might wait some time to sell his end of the apartments (the ones he gets) for the property prices to be spruced up again. Net net, given the long multi-year tenure from dynamite-destroy to grah-pravesh, for an apartment owner like yourself the timing shouldnt really be a big factor.
Great topic
Thank you! 🙌
Very well presented
Glad you liked it. Thank you very much
Excellent video, very insightful
Glad it was helpful!
Nice one as always .
Thank you
This video is very informative and as usual very thought of. I want to understand why we have such high demand for residental properties even from investment perspective but as per rental ROI is less than 4% ..
Thank you. Demand has to be high in a country like ours with it's high population, growing urbanization, favourable demographics, social status etc. I read a report where it says the housing demand is likely to go up to 9.6 crore houses by 2036.
Very nice explanation, keep going sir❤
Thanks
Good one as usual Shankar ...could you pls do a video on India listed REIT please
Thank you! I have a video on REITs which has done well, it's one of my earliest industry analysis video -- th-cam.com/video/vIceteorM94/w-d-xo.html
I have a fairly good understanding of all the the indiacators that you talk about. I would also request you to give us links where we can find these numbers to make a better choice. Kudos to your great work Sir.
Great to know you know all this. Thanks for the suggestion
Great sir❤
Thank you!
Hi Shankar, wonderful video. I was wondering what are your thoughts about the r eal estate (asset) prices - residential specially?
Thank you very much for asking this as a question. As you might have noticed much of the others comments are more of an emotional ranting & the few who crossed the line are not welcome in my house (comments from them blocked). Respectful discussions supported with data/evidence are always welcome.
I understand your question is on the growth in real estate prices -- which as an investor you should will be happy about and as a consumer, you'll not be pleased with this one (its important to clarify with which lens we are examining this). Now, as part of my research, I examined the realization prices of various companies across years and I'll present Sobha's data here
Sobha's average price realizations (rupee per sq.ft) over the years have been:
FY14: 6,898
FY15: 6,788
FY16: 6,342
FY17: 6,704
FY18: 7,892
FY19: 7,749
FY20: 7,075
FY21: 7,817
FY22: 7,883
FY23: 9,200
As one can see here the prices are not linear and there are years where the realizations are down upto 10% and some years, there's a spurt of upto 16%. On an aggregate basis, in the last 9 years, the realization price has increased by just 3.3% per annum. I am certain, many would have been expecting a much much higher number but it's just 3.3% and I believe, it's the occasional spurts & news on properties getting sold-out that creates the illusion of crazy prices. I'm not saying I have the money to afford another house now :) .. but I can certainly use this to explain why a separation is needed between emotions and research.
If you have time, please allow me to showcase another company in the affordable housing segment - Ashiana Housing (and you can check out the annual reports of other real estate companies). Avg. price realizations in different select years were:
FY09: 1,906
FY14: 2,926
FY19: 3,082
FY23: 5,080
So again, there has been a spurt in pricing in the last 1 years i.e. FY22 to FY23 -- a 30% jump -- which augurs well for the investors of Ashiana Housing but not that well for the buyers of properties.
This is what I've found on prices so far. If curious, please read the earnings calls of these companies. Some very interesting industry related information comes out from there.
Hope this is helpful
@shankarnath Fabulous analysis. Please post this separately also as a fresh page. It will help other members also.
@@shankarnath Fabulous analysis. Please post this separately also as a fresh page. It will help other members also.
Can you brief what affects exchange rate Does infaltion in India affect USD to Inr Can you brief it
Sorry, I'm not sure as I haven't done any work on exchange rates. It's not an interest area for me.
Hi Shankar Sir,
Can you please guide us on how to determine about when to switch or exit a mutual fund? I have UTI Flexicap Fund in my bucket which is performing poorly at the moment. But few years back hdfc flexicap fund was also giving negative returns, and then a turnaround story happened. Can you please make a video on this topic?
Thanks for the suggestion. Btw, I have a video on exits/switches. Pls watch: th-cam.com/video/9GZtVsg9HC8/w-d-xo.html
Thank you, expecting more sectoral analysis videos from you.
Thanks for the suggestion
Really amazing. Maza aa gaya
Thanks!
Hi Shankar sir, if you are reading this comment, I have a request to you.
Sir can you please share your views on swing trading or can you make a video in which you explain some good swing trading strategies. Thank you so much.
Apologies, I don't do swing trading so have no comments on it
@shankarnath Should we invest in New NFO of hdfc index realty fund
I haven't examined this index yet. On the face of it, does seem like a workable idea
Sir, can you please guide me on how to get a full list small cap and midcap stocks ?
Please go to AMFI website, you'll find it there .. www.amfiindia.com/Themes/Theme1/downloads/AverageMarketCapitalizationoflistedcompaniesduringthesixmonthsended30Jun2023.pdf
where can we get all these metrics for any developers?
Many of them can be found in the quarterly investor presentation that accompanies the earnings calls
let me predict... ur subscriber base will be 10X in next 2-3 yrs.. super content man.... amazing
Thank you 🙌
I love watching your videos. I started investing after watching your videos. Thank you for the inspiring us through your videos to invest. How to contact you for consultation? Thank you
You are so welcome! Unfortunately, I don't offer 1:1 paid consultations anymore. If that window opens, I'll circle back.
Super this is my first one and i am all ears. Logical, any subsvription plan we have
Thank you
Hi sir , loving your videos . U had done one to one advice earlier . Any plans of doing it again ?
Thank you very much. Sorry, I have taken a break from 1:1 consultations, will circle back once I restart
From where can I get the pdf or PPT of the crux of above video
I'm sorry, there is no PPT or PDF to share from our end
Sir, please make a video on books,sites,tools used to be successful investor.
I'll try. In the interim, may I suggest you go through annual reports and earnings call transcripts to identify quality stocks.
pls make a series on sector and industries
I've been doing it for some time now. Here's the playlist: th-cam.com/video/AX6BDecnwRQ/w-d-xo.html
Hi any video on India bulls real estate. Thnx
Sorry, I haven't started with stock specific videos on my channel
Hi SN,
I still believe that real estate especially in tier 1 cities like Mumbai ( living here) are very expensive considering we are buying fractional land (mostly flats). Can you please guide me in this.
Should i buy now? Or wait for 4 more year for the mentioned downturn by you?
Hello. This video is not on buying real estate .. its on investing in real estate stocks & the variables one should examine. I can't give stock-specific opinions but as a sector, I have invested in it as I see 2-3 more years of upside here.
@@shankarnath Hi SN.
I was asking about buying a property and not stocks. So if you could guide me.
Oh, I have no idea on buying real estate. Very sorry!
n the past there were few Mutual Funds scheme which got closed or didnt worked Many youtubers influecners are making videos on mutual fund scheme but no one is telling us the history of mutual Funds in india like in year 1999-2000 many mutual fund scheme closed and many people money were gone almost to nil we want a video on those mutual funds why the fund got closed and how does this all happen how do we will get to know about when a mutual fund will close their scheme for example- Reliance natural resources Fund
Do make a video on this and share some knowledge which others wont thnakyou
Please analyse agriculture and agrochemical sectors…awaiting
Thanks for the suggestion
Really Thanks for the elaboration of this cycle. I've l
1 Quick question - 02:40, How come "Home Loans are cheap" when the interest rate cycle is at peak?
If customer pay advance for there purchase, its interest free
Why satya nadella’s photo was used?
Sir.. I request you to kindly analyse and do a video on Guaranteed Income plan given by ET Money and other similar platforms, which provides tax benefit on the income generated on investment for a long term. Thanks sir
Thanks for the suggestion
@@shankarnath sir you have replied to my comment, isse badi baat aur kya ho sakti h.. I am so so glad.. Thanks.. The Guaranteed income scheme is advertised as a comparable option to PPF with investment limit of 5 lakh per annum and tax free interest income..
@@badalspidey Hello, yes. I'm aware of guaranteed income scheme although I have never analysed it because I've never felt the need for it myself. The IRR changes from scheme to scheme but is generally between 5 to 7% tax-free
@@shankarnath thanks sir.. One more query.. What is Algo trading.. I have come across some videos. There is some ambiguity about their SEBI clearance.. And actually how does this Algo trading work. And do they really generate profits as they claim.. Any trustworthy or reliable algo trading platform, which has publicly open results.. Thanks
@@badalspideyKindly read about algo trading in detail on the Internet
The NRI weirdly looks like Satya Nadella😅. 7:17
Majority of real estate builders accept unaccounted money in their transactions going as low as the circle rate .
This unrecognised revenue which should ideally belong to shareholders is simple siphoned off by the promoters .
This has prevented me from investing in real estate stocks. What are your thoughts ?
I'm with you on this one - just the other way around. A minority of real estate have delivered 100+ projects over the last 15-20 years without any allegations of siphoning of money. I believe these are invest-worthy.
@@shankarnath
Apart from Godrej properties, there’s not a single real estate listed company in my knowledge which accepts only all cheque deals
Thanks for sharing your knowledge on the same
What about affordability?
Real estate stocks are pretty affordable
bro do u say that 3-4 crore flats are affordable? as far as i know most of the appreciation happened in top 7 cities and that too in certainblocks like in delhi it in noida and ggn specific areas and mostly luxury segments ..posh areas rates almost 50% up whereas not much appreciation in affordable house or below 1 cr prop
Agree. We have a recently bought property in luxury segment which is appreciating up at a very good rate and another old construction which is going down in value.
this is going to reverse qhen luxury supply comes in 2026-2027. Note there is 8-9% transaction cost stamp duty, registration,dealer charges and for real estate. So when property becomes 3 crore for new buyer 3.3 crore is the buying price. Right now luxury supply is less so appreciation happening.
It is simple. It's happening bc of wealth inequality. Economy, GDP booming but reality is poorer are not the one getting most benefitted, it is the rich. Rich are getting more richer and there is run among them buy luxurious items and flat.
But many people believe that" look luxurious item sale is so high and India is developing". Lol🤦
@@Bestshivam Modi or Congress or AAP ..they are the same and always favour the rich ..In gurgaon they restricted the height of builder floors to 3 ..in Noida they restricted the registry to plot not floor ..In Delhi Central govt did not notify DDA redevelopment and land pooling policy .. All and all sab chor hai ..Sabka Malik ek he hai ..Reliance ki kasam .. Koi ghotale karke lootata hai koi tax bada k koi policy change karke ..Middle class have to bear the brunt
How reliable are the reports from knight Frank,JLL and Anarock
No idea but do verify if you have the means
Great video on analyzing real estate stocks! The lesson on understanding real estate cycles was insightful. Thanks for simplifying a complex industry. BTW - Would love to have you join our community of TH-cam Thought Leaders where we help each other grow our channels.
Glad it was helpful!
Please do check on the growth of fractional ownership of Grade A properties.
yaar honestly speaking, while it sounds very good - I'm very doubtful. Globally countries are falling into a recession and even in India, the GDP is artificially inflated because of the unusually small GDP Deflator.
India is becoming like China where their numbers released by govt can not be trusted 🤫
Thanks for sharing
Tell us about DLF ELECTROL BOND after income tax raid.
Kindly read it on the internet
I strongly belive the this development is not collective devlopment of whole india and every class/group of population. It's happening bc of wealth inequality. Economy, GDP booming but reality is most poorer are not the one getting most benefitted, it is the rich. Rich are getting more richer and there is run among them buy luxurious items and flat.
But many people believe that" look luxurious item sale is so high and India is developing". Lol🤦
Sir with due respect i differ with your data .. i can see the data u presented somehow followed the USA trend and the current situation in India is also exactly the same like USA but that real estate was driven by FIAT currency dollar .. this fiat currency made sure that the middle class in jobs getting constant supply of fat money .. Oil producing nations were taking payments in dollar and then investing in US .. Japan India china all buying the US debt .. so in short it was hafta wasooli by the US and now world is dumping them .. i predict US real estate market will fall and probably the world will follow .. India's service export will also take a hit and pay corrections are already happening in Tech/IT space
Dear SN, real estate cycle is gonna end on feb 2025
Thx for sharing your wisdom
Nice prediction, I loved it when people told 2012 was the end of the world. I was most excited at that year and equally disappointed as well!
Price is high because of higher govt tax and higher price increase by the developer.
Wow, i didn't know Shankar you lived in Satya Nadella Apartment😅
The demand of houses below 50 lakhs price is very low.
No one catched at 7:10, that its Satya!?
M stock is not in smallcase 😢😢
How to use mstock in smallcase
@@umashankar847you can’t.
Do not advertise this company,it isthr
Do not advertise this company as mstock has Eaten Away >1 lacinintradY due to technical glitch and internet breakdown in last 3 to 4 occasions last 4 months. Pls.make them responsible for their wrong act
Indian real estate is hub of black money. If you have black money then its best place to dispose money otherwise stay away.
You cannot make outstanding returns in real estate with just white money. That's why real estate historic average returns in Indian are less than 8% and REITS launched in last couple of years have given just -ve returns when real estate is in so called boom.