Low inventory, better returns, undervalued shares: Should you home in on southern realty stocks?

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Synopsis
Southern real-estate companies are outperforming the Nifty Realty Index. Since the nightmarish market crash in March 2020, Sobha Developers and Brigade Enterprises have risen around 287% and 150%, respectively. Over the last 10 years, southern markets have given better returns to investors, compared to their high-ticket counterparts in Mumbai. But equity markets have always undervalued real-estate companies from south.

When Chirag Shinde (name changed), an IT professional from Mumbai, decided to move to Bengaluru to work for a telecom-software company in 2002, his parents advised him to buy a house. Eventually, he managed to buy not one but two — Bengaluru in 2008 and Pune in the following decade. Interest rates were low and his income was stable and growing. It made sense to put in money in real estate in the two cities, as base prices were far lower compared