Realty Sector Growing Slowly And Steadily

The economic slowdown is prevalent and is impacting several sector stocks including real estate stocks negatively. Having said that the branded real estate developer are showing signs of steady recovery. Shohini Nath explores how grim the situation is for the sector even as she highlights the pockets of growth within the sector. Read on.....

- Shohini Nath

The real estate sector in India is a key sector that adds to the growth and development of the country. With rapid urbanization, growing workforce and nuclear family lifestyles, the demand side for real estate remains strong. India's population currently stands at more than 1 billion, which accounts for 17.74 percent of the total world population. Due to the pressing need for housing and modern amenities, the real estate sector has been witnessing constant growth over the years. However, the growth was muted for a couple of years and investors are now questioning whether it is a smart move to invest in the realty sector or whether they should avoid it.

On the global front, post the strong economic growth in 2017 and early 2018, the growth has notably shrunk due to a confluence of factors affecting the major economies. The global growth rate is estimated at 3.6 percent in 2020, according to the World Economic Outlook. The Indian economy has decelerated at a faster pace in the fourth quarter to 5.8 percent, the lowest recorded in five years. The liquidity crisis of NBFCs and the default by IL&FS both hampered consumer demand, which contributed greatly to the economic slowdown.